Regulations - Regulatory 2008 Page 1 Regulations The price...

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Regulatory 2008 Page 1 Regulations The price of a home can be increased significantly by regulations and the regulatory process. This increase may be a direct result of regulations requiring specific site development or construction actions or it may have an indirect effect caused by delays related to development review board schedules, requests for zoning changes, plan review delays, permitting delays, etc. Regulations (e.g., building codes, zoning codes, subdivision regulations) may be imposed by a local jurisdiction for the purpose of protecting the health, safety, and welfare of its citizen s . This authority is granted by the Constitution. Other regulations are imposed to protect the environment, to maintain and enhance the aesthetics of an area, or to preserve the quality of life through the availability of services and infrastructure. All of these motivations are important and most would agree that they are legitimate responsibilities of state and local government. It is important to recognize that regulations, specifically the building code, specify the minimum standards to be met; they should not be considered as the ultimate goal for design, development, or construction. Rather, the building code should be thought of as the minimum level of acceptable building practice. A second important point to recognize is that studies have shown that regulations account for as much as 35 to 40 percent of the cost of a home . The cost of complying with the regulatory requirements becomes part of the price of the home that is paid by the buyer. In the case of homes built to meet the affordable housing need in a community, this price increase frequently eliminates many young newly weds from seeking their first home or eliminates lower-income families from the pool of potential buyers. The National Association of Home Builders (NAHB) estimates that every $1,000 increase in the price of a home forces more than 500,000 families out of the housing market nationwide 1 . When considering the impact on lower income families, the effect is disproportionately greater. Local regulations affect three areas of development costs and have a potentially large impact on the total cost: Raw land costs represent 8 to 25 percent of the cost of new homes and are influenced by density requirements, restrictions on development on wetlands and other protected areas. Site improvement costs represent about 10 to 20 percent of the cost of a new single-family home and are influenced by lot frontage requirements, and through the labor, materials, and equipment requirements to meet site improvement standards for infrastructure such as streets, sidewalks, utilities, drainage, parking, and land dedication. Construction costs
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Regulations - Regulatory 2008 Page 1 Regulations The price...

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