Impact of Government Regulation on Housing
A new NAHB study looks at the impact of government regulation on housing affordability and helps explain how even modest impact fees can take a toll on home buyers. Based on national mortgage underwriting standards and incorporating the latest data from the U.S. Census Bureau, it contains detailed results for more than 300 metro areas.
One crucial finding: 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 another $1,000 to the final price of the home.
The study also says that each $1,000 increase in the cost of a new median-priced home forces 217,000 prospective buyers out of the marketplace.
Clearly, local governments need to understand that higher regulatory costs can push the price of housing beyond the means of moderate-income workers, including teachers, firefighters, police officers and others who make their community function, and this study helps illuminate the issue.
Of course, the degree of the impact can vary significantly in each market and is largely a function of local income distribution, house prices and population.
To view a detailed breakdown of how a $1,000 increase on a median-priced home affects households in individual metro markets, visit www.nahb.org/pricedoutcities.
The full study is also available online at www.nahb.org/pricedout.
For more information, contact Paul Lopez at NAHB at 800-368-5242 x8409.
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