Earlier this year the National Association of Home Builders (NAHB) rolled out their ten-point plan to ease the affordable crisis in America. In this article we’re going to list and briefly discuss all 10. In upcoming weeks we’ll be discussing each one of them in more detail.
These are very difficult issues and won’t be solved quickly but I think each one of us can help a little bit by firstly thinking about how these impact us and how they might be improved.
The List is as follows:
Excessive Regulations
This covers a multitude of areas that in many cases end up being hidden taxes or a fees that just don’t show up anywhere but have a dramatic impact in the overall cost of housing. For example in the development of property for home construction it’s estimated that regulations are costing the average homeowner almost $42,000. These costs include studies that are required prior to development, property that has to be dedicated to the city whether for streets and right aways or park lands, school land etcetera, cost of zoning property and additional development standards including stormwater management and so forth. No one is saying that these things aren’t needed but because of the rising cost a more careful evaluation of them that needs to take place.
Additional cost for building the home include cost to conform to new codes many communities are requiring very stringent design and architectural standards OSHA requirements for job site safety and additional fees paid by the builder including capacity fees and utility connection fees. These costs are more than $52,000.
The Total is nearly $94,000!
The point is before your home is began, even before you created a plan and included all the features that you want in your new home, your builder has incurred up to $94,000 in costs. This does not include the cost of the raw land or the actual cost of developing the property in order to have the ability to even build a new home. As a point of reference in 2011 these same costs were estimated to be around $65,000.
In total these costs represent nearly 25% of the final cost of a new home. Multi-family is even worse as the cost represents nearly 40% of the cost.
As rates remain high and costs continue to escalate each regulation should be evaluated not only for the benefit, but also the cost.