Guys inside and out: too much regulation?
A story was relayed to the guys about a renovator working in a “high end” jurisdiction.
Part of the work consisted of replacing an existing concrete sidewalk that bordered the property and crossed the roots of a large old silver maple. The jurisdiction had a tree ordinance that required the contractor to hand dig all areas around the tree to prevent damage to the roots. Tree work involved special permits and several inspections that extended a job from two days to several weeks.
At the end of the work, the contractor then had to purchase a deposit of $ 30,000 payable to the city guaranteeing that the tree would survive at least seven years.
The real irony here is that the city classifies silver maple as an “junk” tree that it doesn’t even want to plant within its borders.
Years ago, a photo of a landowner appeared in the local newspaper showing him clearcutting much of the land. His reasoning was tied to an impending ordinance that would have economically prevented him from cutting down trees and developing the land for affordable housing.
No wonder the National Association of Home Builders, NAHB, denounces the high cost of regulation and its impact on housing and construction. The main mission of the NAHB is to provide “affordable and safe housing” to all who need shelter. “Affordable” is a key word.
According to statistics from the NAHB, regulations imposed by government at all levels account for more than 24% of the final price of a new single-family home with 14.6%, or three-fifths, due to the costs assessed during the phase. development of the land.
Land use planning regulations can literally prevent certain demographics of buyers from buying by making compliance costs prohibitive. Minimum lot sizes, land set aside, frontage requirements, and setback requirements alone can make a developed lot too expensive for most.
When you consider that the average price of a new home in the United States last year was $ 375,000, we’re talking about an average regulatory burden of $ 90,000 for each home.
There are also hidden costs that apply but are not factored into the time data. When a two-day job is extended into weeks, it costs money. Permit applications and inspections alone can explain prolonged delays, even in small housing projects.
The real question becomes, “How much regulation is too much regulation?” “
Safety is a key principle behind the cost. We can build a house that won’t burn. We can build a house that won’t collapse in a typical tornado or hurricane. You can build a house that heats with the flame of candles and the body heat of the occupant. But how many can afford to buy this house?
The Home Builders Association of Michigan, HBAM, devotes most of its financial resources to fighting regulations that add costs to no real benefit. It’s a judgment call backed by data.
Few would dispute the benefit of requiring smoke detectors in detached single-family homes, but when advocates for some product manufacturers attempted to require sprinkler systems in new homes as well, the HBAM showed support. statistic indicating minimal improvement in performance in a house fire compared to the added cost of installing and maintaining sprinkler systems.
And the increase in regulation seems to create a momentum of its own. Installing GFCIs, GFCIs, in potentially “wet” areas was a great idea many years ago. Now they are needed in twice as many areas, including the sump pump. We know that many electricians will not plug their own sump pump into such a sensitive circuit breaker for fear of a flooded basement when high humidity causes the circuit breaker to trip.
No one can dispute the claim that “even one life lost is too much”, but we can all recognize the burden of the extra costs on the average family.
Keep in mind that every buyer has a price that they simply cannot exceed. Years ago, the NAHB released data supporting the idea that for every $ 1,000 increase in the cost of a new home, 100,000 potential buyers were “capped” and prevented from buying. Where do we want these people to live?
Regulators in many jurisdictions have seen new developments as a way to strengthen general fund funds.
They will charge a real estate developer an “impact fee” for creating building lots based on the assumption that the new development will “cost” the city over time. These costs are passed directly on to the buyers. Stormwater discharge assessments, a wider range of building and development permits, and “connection” fees are regularly billed.
This ignores the fact that every new home and every new commercial building will be subject to annual property taxes for as long as they exist and that occupants stimulate local economies with their demand for services and products.
Years ago, HBAM supported legislation that required building departments to charge only a fee proportional to the cost of running the department. Surplus funds could not be taken to finance other public entities.
So where do we draw the line? This is a question that the industry faces every day in its attempt to bring affordable housing to the market. And that’s a question the guys deal with every week on AM760, WJR News Talk radio, and insideoutsideguys.com
For housing tips and more, listen to Inside Outside Guys every Saturday and Sunday on News / Talk 760, WJR-AM, 10 a.m. to noon, or contact us at insideoutsideguys.com.