Layers of excessive regulation translate into higherÂ rents, reduced affordability for consumers and on average, account forÂ almost one-third of a multifamily projectâ€™s development and building costs,Â the National Association of Home Builders (NAHB) told Congress today.
Testifying on behalf of NAHB before the House Financial ServicesÂ Subcommittee on Housing and Insurance, Steve Lawson, chairman of The LawsonÂ Companies based in Virginia, said that overregulation of the housingÂ industry is felt at every phase of the building process.
â€śIt results from local, state and federal mandates,â€ť said Lawson. â€śItÂ includes the cost of applying for zoning and subdivision approval,Â environmental mitigation, and permit, hook-up, impact and other governmentÂ fees paid by the builder. In many cases, these projects become financiallyÂ infeasible and, therefore, are not built.â€ť
The congressional hearing on regulatory burdens on multifamily housingÂ development was spurred in large part due to a new study by NAHB andÂ National Multifamily Housing Council called Multifamily Cost of RegulationÂ that details how regulatory costs account for 32 percent of the cost ofÂ developing new multifamily properties.
The new research shows that well over 90 percent of multifamily developersÂ typically incur hard costs of fees paid to local governments, both whenÂ applying for zoning approval, and again when local jurisdictions authorizeÂ the construction of buildings. Furthermore, state and federal governmentsÂ are increasingly becoming involved in the process and layering on additionalÂ levels of fees and regulations.
â€śMultifamily builders and developers are seeing strong demand, but there areÂ headwinds that have impacted further development,â€ť said Lawson. â€śSomeÂ developers have had difficulty getting projects off the ground due toÂ regulatory burdens and neighborhood opposition in certain parts of theÂ country.â€ť
To help ease regulatory burdens and improve housing affordability, NAHB isÂ urging policymakers to:
The National Association of Home Builders is a Washington-basedÂ trade association representing more than 140,000 members involved in homeÂ building, remodeling, multifamily construction, property management,Â subcontracting, design, housing finance, building product manufacturing andÂ other aspects of residential and light commercial construction. NAHB isÂ affiliated with 700 state and local home builders associations around theÂ country. NAHBâ€™s builder members will construct about 80 percent of the newÂ housing units projected for this year.