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Business Observer Friday, Apr. 22, 2016 3 years ago

Developer's lament

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Homebuilders often cite the high cost of regulations as a reason there are affordable housing predicaments in so many markets nationwide.

Homebuilders often cite the high cost of regulations as a reason there are affordable housing predicaments in so many markets nationwide.

John Burns Real Estate Consulting, an Irvine, Calif.-based data firm with a Florida office in Fort Myers, recently decided to check that theory.

“After hearing many horror stories of cost increases that were far more than just materials and labor, we formally surveyed more than 100 home building executives across the country for specific examples of new home construction costs that did not exist 10 years ago,” the firm says in a statement. “We were overwhelmed by the reply as well as the builders' level of frustration.”

One issue that came up repeatedly in multiple states is energy code costs. Builders in Florida, Pennsylvania and California, among other states, cited $8,000 or more per house in new energy code costs. Other national issues included sprinklers in townhomes at more than $5,000 per home, understaffed planning offices, and lengthy utility delays.

Respondents in Florida had some state-specific responses, including:

$5,000 or more per house in additional school fees for one city;

$5,000 or more to raise homes one foot above flood elevation levels per new FEMA maps;

$5,000 or more per house in infrastructure improvements that benefit the city, but not the project.

$7,000 per house increase in fees, including utility hookups;

$2,000 per house in new “beatification” landscaping requirements.

Tellingly, given the us vs. them dynamic in homebuilding and government oversight, the firm “intentionally omitted city names for fear of city retaliation against our survey participants.”

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