The portion of the cost of a new single-family house caused by government regulations has jumped almost 30 percent in the past four years, according to a study for the National Association of Home Builders
This is more than double the amount disposable incomes have risen in the same period.
Regulations added $65,224 to the price of a new home in 2011, according to the NAHB, but shot up to $84,671 today, an increase of 29.8 percent. Per capita disposable income rose by only 14.4 percent in the same period, making it more difficult for home buyers to absorb the increase.
Most of the regulatory costs — 14.6 percent — are incurred during the development of the lot. The other 9.7 percent is placed on the builder after purchasing the developed lot.
"Regulations come in many forms and can be imposed by different levels of government," the report says. "At the local level, jurisdictions may charge permit, hook-up, and impact fees and establish development and construction standards that either directly increase costs to builders and developers, or cause delays that translate to higher costs."
The federal government can add its own costs, according to the report, "by requiring permits for stormwater discharge on construction site, which may lead to delays in addition to the hard cost of filing for a permit."
The report predicts more costs from regulations yet to come.
"EPA's Chesapeake Bay Cleanup Plan is not only driving up development costs in the effected states but is viewed as a template for establishing more stringent standards elsewhere in the country as well," the report said.
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