When regulations are well meaning
We've all met people who are well-meaning, the ones who want to help you carry your groceries even when you don't really need help and are in a hurry, the ones who tell you about the two for one items in Publix when you don't care and the ones who insist you sample a piece of their strawberry pie when you break out in hives from strawberries. These are all nice gestures but the well-meaning principle can get in the way, especially when it becomes a regulation.
Home builders around the country are all experiencing an increase in regulatory costs to the tune of over $80,000 per single family home. According to the National Association of Home Builders this is an increase of nearly 30 percent on average over the past five years for builders to comply with regulations.
Some of the well-meaning regulations include the cost for a new type of storm-water capture device, customized architectural plans, defining the amount of brick that can be on a home exterior, specialized surveys required to determine whether endangered bats are on a property, as well as dictating the removal of trees and more. Much of the increase in regulations is generated by environmental awareness, which is certainly a well-meaning objective, however, they all cost money to comply with, not to mention the required fees that go along with them.
For the past five years, the median new home price has been 32 percent to 38 percent higher than the median price of a resale home according to data from the U.S. Census and the National Association of Realtors. This is the largest gap since the figures started being tracked in the 1960s and compliance costs based on new regulations are one of the factors affecting the increase, and have permanently increased the cost to build.
In addition, local city and municipal impact fees that are charged to builders and developers to pay for services like roads, sewers and parks have increased 45 percent in the last decade. Florida and California in particular, have used this method to fund essential services for a long time, with the defense that we need to pay for new infrastructure some way.
Manatee County's Administrator Ed Hunzeker was recently quoted in the Wall Street Journal after the county voted to raise impact fees for new developments by 80 percent or more over the next three years to compensate for the cuts during the economic downturn. He said, "Impact fees don't set the price for a home. The market sets the price of a home."
Well, that may be true for resales, but new construction always passes expenses on to the buyer, and if you want new construction, it's the only market. Based on the amount of new construction and developments that are slated for Manatee County in the upcoming years, we can look forward to state of the art infrastructure.
Everybody wants everything, and no one wants to pay for it. Existing homeowners say don't increase my taxes for a required road going into a new development, and by the way, make sure that the mangroves aren't impacted. Hunzeker is right. Someone has to pay for progress, but do we really need to require developers to perform expensive environmental studies that will not really change anything? Take some pity on the poor new home buyer. Don't waste taxpayer money on well-meaning regulations just because you can.
