Regulatory burden joins the labor shortage as the next big hurdle the building industry needs to overcome, according to John McManus over at sister publication BUILDER. New data from the NAHB shows that, on average, regulatory costs amount to a 25% share of home price, and can even reach as much as 30% in the upper quartile of homes. That all comes from fees, obligations, taxes, and delay expenses.
Combining this data with information from Metrostudy, McManus estimates that in 2015, home buyers paid in aggregate $36.5 billion of their home costs to local, county, state, and federal regulators. Even in spite of that, McManus still remains optimistic:
Builders and developers--collectively--have leverage. You can say, hey, we're committing 25% of every home in every community we build toward the well-being and sustainability of communities, counties, states, and the nation, and we want you 1. to use the money responsibly, and 2. to invest in a learning curve so that you can, like us, do more with less. This would be so that people who are trying to get into the homeownership pipeline--the ones who can not either afford $360,000 for their new home, nor who can afford 25% of their home price to go to local, county, state, and national governments.
Check out the rest of the story over at BUILDER.