Regulations Pump Up Housing Costs; HUD Calls State, Local Restrictions 'Obstacle' to Homeownership

The Washington Times (Washington, DC), February 15, 2005 | Go to article overview

Regulations Pump Up Housing Costs; HUD Calls State, Local Restrictions 'Obstacle' to Homeownership


Byline: Marion Baillot, THE WASHINGTON TIMES

Onerous state and local regulations have driven up housing costs in the past decade, preventing millions of families and public servants, including police officers and teachers, from living in the community of their choice, a U.S. government report said yesterday.

Regulatory barriers such as fees levied on developers, out-of-date building and rehabilitation codes, time-consuming permitting and approval systems, excessive land development standards and extreme environmental restrictions can increase building costs by as much as 35 percent, according to the Department of Housing and Urban Development (HUD).

The "significant role [of regulatory barriers] in driving up housing costs poses a crucial obstacle to achieving the national goal of increased home ownership," the report said.

David L. Pressly, vice president of the National Association of Home Builders, estimates that a 15 percent increase in the cost of a home prevents 7 million households nationally from becoming owners.

Housing, according to HUD, is affordable if a household pays no more than 30 percent of its annual income on housing.

HUD said state and local officials, not the federal government, must take action to break down regulatory obstacles to affordable housing.

"We don't want to dictate, we don't want to be Big Brother here. We believe there is no one solution that fits every region: the right approach lies in the local community," said Deputy Secretary Roy A. Bernardi.

Among the regulatory obstacles to affordable housing, HUD cited the misuse of planning concepts intended to reduce urban sprawl and the growing practice of impact fees on developers, a mechanism used to finance the infrastructure and public services associated with new development. …

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