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NMHC and the National Association of Home Builders (NAHB) recently released research found that regulations imposed by all levels of government account for an average of 32.1 percent of multifamily development costs and that in a quarter of cases, that number can reach as high as 42.6 percent.
Multifamily development has long been subject to a significant array of regulatory costs, but this research is the first to analyze the extent of the regulation. To obtain the data, NMHC and NAHB surveyed members and inquired how much regulation exists, and how much costs said regulation adds to the cost of their multifamily projects.
Although some government regulations are necessary to maintain the safety and wellness of building occupants, the increase in superfluous regulations unnecessarily drive costs. “The current regulatory framework has limited the amount of housing that can be built and increased the cost of what is produced,” said NMHC President Doug Bibby. “At a time when states and localities are struggling to address housing affordability challenges, public and private stakeholders should work together to streamline regulations and take the steps necessary to expand housing in communities across the country.”
Through this research, NMHC is working to raise awareness regarding how much regulation currently exists and how much it costs developers. In doing so, NMHC hopes to encourage governments to do a thorough job of considering the implications for housing affordability when proposing and implementing new directives.
The full report can be found here.
