Added regulations and fees make getting a project off the ground more difficult for builders, like Taylor Morrison and its Sea Summit development in Southern California, reports Diana Olick of CNBC.
The Sea Summit site was purchased two years ago by the Arizona-based builder and its financial partners but dates back 40 years. The recession was the latest killer, but strict new regulation, federal, state and local, have made the project far more expensive today than it would have been decades ago.
"The requirements for this project have been enormous, there is no question about it," said Phil Bodem, president of the Southern California division of Taylor Morrison.
Taylor Morrison has planned to build 309 homes on the site, about half the number it could have built decades ago. The rest of the land is mandated open space, public trails and new vegetation, all funded by developers. The cost of new development, not just in California, but across the nation, is rising dramatically, due to new regulations.
"Every time you turn around there's a new regulation. If a piece of property has water on it for more than 30 days, it's now considered a wetland. The governments are worried about storms and the nails running into the ocean. Everywhere you turn it's getting more and more expensive to build a home, and it's taking longer to get it built," said John Burns of California-based John Burns Real Estate Consulting.