Depending on who you ask about why new housing is out of the reach of most new home buyers, the answers range from inflation to rising building materials, the shortage of building materials, fuel and transportation costs, and even the shortage of skilled labor and higher wages.
But the biggest reason for the lack of affordable housing are the laws and rules imposed by state officials and politicians which often artificially drive up the cost of housing.
According to NAHB studies, regulations applied to the current average price ($394,300) of a 2021 new home, regulation accounts for $93,870 of the final house price. Of this, $41,330 is attributable to regulation during development and $52,540 is due to regulation during construction. On a percentage basis, the latest estimates show that regulations imposed by government at all levels account for 23.8 percent of the final price of a new single-family home built for sale.
Modular housing is also required to have every home third party inspected and reviewed by state code officials at a cost of thousands, if not tens of thousands, of dollars.
In Washington, state and local laws, permitting, building restrictions, and regulations – add an average of $144,000 to the cost to construct a new, median-priced home.
No wonder the affordable housing market is so screwed up.
Now, ask yourself how much more will be added in regulations and restrictions as all those building code writers meet in the coming months and years as the people behind writing those codes contemplate banning gas appliances, more stringent green and sustainable requirements as well climate change codes.
How long before laws are put in place to require existing homeowners to upgrade their homes’ insulation, remove gas appliances, and meet energy efficiency and environmental impact?
We all agree new homes need to have requirements as to safety, health, and structure but do we really need all the rest?
Gary Fleisher is the Editor in Chief of Modular Home Source and Offsite Builder magazine. Email at [email protected]
