Tuesday, October 8, 2019

An Eye Opener at this Year's BSC Annual Summit

Affordable housing is a term you hear thrown around by every town, city, county and state housing official throughout the nation. It was also one of the main topics and buzzwords at this year's BSC Summit in Pittsburgh.

Builders and developers want to build more to meet the demand and were looking for innovative new approaches to the problem at the Summit but more and more regulations imposed at all levels of government is making it almost impossible to accomplish.


Many factors can constrain housing starts — the availability of finished lots, labor supply, credit for land acquisition and home building. But regulations and government fees are becoming the greatest barrier to new housing starts.

The reality is that the nation faces a chronic housing shortage. That means higher housing prices, rising rents and increasing economic stress for low and moderate-income households.

The single greatest cause of rising housing prices is excessive regulations that increase the time and cost of building new homes. Government regulations limit the supply and drive up the costs of land. They increase the costs of construction. In some places, out-of-control impact fees drive new home costs beyond the reach of the typical household.


In fact, it was stated at yesterday’s BSC Annual Summit that almost one third of the cost of building a new home is now regulatory costs.

I’ve spoken to many residential modular home factory owners and GM’s about what impact they are facing today that they weren’t just 10 years ago and almost without exception they believe that the rapid changes being made to codes and regulations at all levels is beginning to take its toll on the builders.

Added costs of regulations and codes during production of the home, after it’s set and finished are up substantially as well as land and use fees and many other factors that have just about killed traditional affordable housing whether it is off-site or modular.n some locations, burdensome regulations and steep impact fees sometimes make it infeasible to build a new home at all.

It is not a coincidence that the overwhelming majority of the least affordable communities in the nation are in California, the most heavily regulated state in the country.

At all levels of government, the “good ideas” of council members and commissioners, state legislators and federal legislators create a deep, broad morass of excessive and overlapping regulations that leads to the unintended consequence of increased housing costs.

No matter how well intentioned these regulations may be, the net effect is a direct and damaging increase in housing costs that disproportionately affects low and moderate-income families.

Millennials entering the home buying market are being shut out of starter homes and forced to make decisions that many Boomers like myself can’t even imagine.

They want to live independently but are looking at alternatives to the over regulated and affordable 1.400 sq ft detached home built in a nice neighborhood.

They may not really want to cut grass or put in gardens like older generations did but the home is central to American family life. It is the place where families make cherished memories, and children are nurtured to build for a better tomorrow.

On the more realistic side of over-regulation, we have to face the facts that what government agencies mandate are rarely taken away.

Can you imagine what rolling back those regulations by half would mean to the affordable housing crisis? Would it mean 100,000+ new affordable homes? I don’t that answer but wouldn’t it be wonderful to find out?

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