Deep Impacts Even as the housing market correction continues to exert downward pressure on new-home prices, localities continue to push forward with new fees and regulations that will further erode housing affordability, according to a new study released by the NAHB. The report on the impact of government regulation on housing shows that each $1,000 increase in the cost of a new median-priced home forces 217,000 prospective buyers out of the marketplace. Based on national mortgage underwriting standards and incorporating the latest data from the U.S. Census Bureau, the report contains detailed results for more than 300 metro areas. The analysis found that every $819 rise in fees paid at the beginning of the construction process—such as an increase in the price of a construction permit, a tap fee, a proffer, or an impact fee—adds an additional $1,000 to the final price of the home. “The study shows that even modest impact fees can have a dramatic effect on housing affordability,” says Jerry Howard, executive vice president and CEO of the NAHB. “Local governments need to understand that higher regulatory costs frequently push up the price of housing beyond the means of many teachers, firefighters, police officers, and other moderate-income workers.”
Growing Green In July, the NAHB informed Congress of its members' consistent efforts over the past decade to promote and develop energy-efficient and environmentally friendly construction techniques for the mainstream home builder. “More than 100,000 homes have been built and certified by voluntary, builder-supported green building programs around the country since the mid-1990s,” Bob Jones, vice president and secretary of the NAHB and a home builder from Bloomfield Hills, Mich., said in testimony before the House Small Business Committee. Congress can foster private sector innovation in green construction for the millions of homes that are waiting to be built, Jones said, by keeping the market free of mandates, allocating funds for providing education and training in green construction on a broader scale, and extending and expanding federal tax credits that passed as part of the Energy Policy Act of 2005.
Business Boom Baby boomers will see their family structures change as their parents age, according to experts who spoke at the NAHB's “Building for Boomers and Beyond: 50+ Housing Symposium 2007.” Speaking at the Symposium in Denver last month, builders, architects, and trend-spotters indicated that boomer lifestyle changes will continue to influence the home building industry for the foreseeable future. “Boomers will drive housing for at least the next 20 years,” said closing session speaker Tim Sullivan, president of Sullivan Group Real Estate Advisors in San Diego. According to the NAHB's current economic and housing forecast, housing units sold to or occupied by 55+ households will account for more than 370,000 housing starts in 2007.