It’s not your imagination, local, state, and Federal regulations are a major part of not having enough affordable housing. Since 2020, we’re still looking at adding more regulations for COVID-19 and all its variants.
Look for Diversity and Inclusion in the Offsite Construction Industry continue to see regulations added that could affect the cost of new housing.
A recent study by the National Association of Home Builders found that regulations imposed by all levels of government on new homes account for $93,870, or 23.8%, of the current average sales price ($397,300).
Of that $93,870, $41,330 is attributable to regulation during development, and $52,540 is due to regulation during construction.
The study was filed out by 2,071 NAHB members and 57 developers, and nearly all of the builders — 98.9%, per the study — reported experiencing some type of regulatory cost during construction. Added together, the average of these costs across all homes in the report accounted for 21.5% of the builder’s construction costs and 13.3% of the final house price.
This news comes on the heels of an NAHB report that found lumber prices have tripled over the past 12 months, and are causing the price of the average new single-family home to increase by $35,872. To illustrate how costs have soared, the $35,872 is on top of the $93,870 imposed by the government. Beams, joists, headers, rafters and trusses, sheathing, flooring and underlayment, interior wall, and ceiling finishing were also taken into account when totaling the costs of a new home, the NAHB said.
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Gary Fleisher is the Editor in Chief of Modular Home Source and Offsite Builder. Email at [email protected]
To learn more about the Offsite Construction Industry, visit: Offsite Builder, the Construction Magazine for Builders and Developers
