Regulation imposed by all levels of government accounts for an average of 40.6% of multifamily development costs, according to joint research released by the NAHB and the National Multifamily Housing Council (NHMC). Changes to building codes in the past 10 years (11.1%), costs when site work begins (8.5%), and development requirements (5.4%) account for the largest share of regulatory costs for multifamily developers, finds the research.
Apartment developers also facing zoning requirements, building codes, impact fees, permitting requirements, design standards, public land requirements, federal OSHA regulations, and other labor requirements. The NAHB and NMHC say many regulations play important roles in ensuring the health and well-being of the public, but many regulations, such as design standards, “go far beyond those important goals and impose costly mandates on developers that drive housing costs higher.” Other regulations are duplicative and require resources to confirm compliance with multiple regulators, according to the organizations.
“This study clearly shows how burdensome regulations are exacerbating the nation’s housing affordability crisis and that officials at all levels of government need to make it a priority to reduce excessive regulatory costs to allow developers and builders to boost housing production and ease affordability challenges,” says NAHB chairman Jerry Konter, a home builder and developer from Savannah, Georgia.
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