Skip to main content

NAHB: Regulations Make Multifamily Construction More Costly

Sep 07, 2018
multifamily construction

Almost one-third of the development and construction costs for a multifamily project are the result of regulations, according to the National Association of Home Builders (NAHB).
Speaking on behalf of the NAHB before the House Financial Services Subcommittee on Housing and Insurance this week, Steve Lawson, chairman of The Lawson Companies based in Virginia, blamed excessive regulation on driving up the costs of multifamily housing, often derailing projects because the expenses are too onerous.
“It results from local, state and federal mandates,” said Lawson. “It includes the cost of applying for zoning and subdivision approval, environmental mitigation, and permit, hook-up, impact and other government fees paid by the builder. In many cases, these projects become financially infeasible and, therefore, are not built.”
Lawson pointed to a recent study by NAHB and National Multifamily Housing Council called “Multifamily Cost of Regulation” that found regulatory costs accounted for 32 percent of the costs of developing new multifamily properties. The report also fund that more than 90 percent of multifamily developers typically incurred the costs of fees paid to local governments, both when applying for zoning approval and when local jurisdictions authorize the construction of buildings.
“Multifamily builders and developers are seeing strong demand, but there are headwinds that have impacted further development,” said Lawson. “Some developers have had difficulty getting projects off the ground due to regulatory burdens and neighborhood opposition in certain parts of the country.”
About the author
Sep 07, 2018
Condo Prices, Sales Falling In Florida

New regulations and rising insurance costs hold back buyers in six major metros.

Feb 26, 2024
Rocket Companies Reports Decline in Fourth Quarter Revenue, Projects Optimism for Future Growth

Despite revenue dip, mortgage giant sees increase in market share and advances in AI technology.

Feb 22, 2024
Broker Action Coalition Unveils Inaugural Board Of Directors

Newly formed nonprofit organization BAC announces industry professionals to guide its mission of legislative change and educational initiatives in the mortgage industry.

Feb 21, 2024
GSEs Report Strong Earnings

Robust performance marks growth for both Fannie Mae and Freddie Mac, despite a dip in home purchases.

Feb 15, 2024
Friendly Competition Joins Forces

The merger aims to enhance local fulfillment and sales support, marking Guild’s sixth acquisition since 2021 and expanding its licensed originators to over 2,100 amidst a challenging market.

Feb 14, 2024
Guild Mortgage Announces Acquisition Of Competitor Academy Mortgage, Bolsters National Presence

The strategic move will see Guild Mortgage enhance its market share and become the 8th largest non-bank retail lender in the U.S., welcoming over 600 loan officers from Academy.

Feb 13, 2024