Sunday, July 24, 2016

Regulatory Costs Inflate New-Home Prices, Builders Say

Fees for park space, stormwater devices, endangered-species surveys; ‘I don’t build affordable houses anymore’

By Chris Kirkham of the WSJ. Excerpts:
"$8,000 for a new type of storm-water capture device required for each house, $3,500 for customized architectural plans required on every lot and about $15,000 to remove a tree from the property."

"they face a bevy of new regulations and higher fees governing everything from environmental quality and park access to regulations on the amount of brick on a home exterior."

"For the past five years, the median new home price has been 32% to 38% higher than the median price of a resale home...the largest such gap since the figures started being tracked in the 1960s. Compliance costs are one of many factors affecting prices of new homes, economists said"

"new homes have become “permanently more expensive to build” because of increased regulations"

"New regulations included a survey required in some areas of the Midwest to determine whether endangered bats are on a property, which builders said can cost $10,000 or more for each new development."

"the average cost for builders to comply with regulations has risen nearly 30% over the past five years."

"local “impact fees” charged to builders and developers to pay for services such as roads, sewers and parks have climbed 45% since 2005 to an average of $21,000 per home across 37 major markets."

"In the town of Prosper, north of Dallas, the city requires a dedication of one acre of park space for every 35 units (single- or multifamily) and a park fee of $1,500 to $2,000 for each unit."

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