Gratefully, new jobs are being created across the state, driving up demand for all types of housing. Supply is not meeting demand and Realtors® report record low inventory of homes for sale in a growing number of markets. How will our industry meet the demand for housing that is required for our growing workforce? First and foremost, we need local community leaders and elected officials to hear and understand that the world has changed for our industry. Housing investment must now be looked at like any other type of economic development investment a community may need or desire. It won’t just happen.
If communities want to attract jobs to their region and have those employees live in their towns, they need to think about their housing stock and the review and approval systems they have in place for land development, new home construction and the renovation of existing homes. If they have a shortage of housing, they need to look at how their systems may be impeding such development and determine what they might be able to do to attract such investment in the future.
Lengthy and complicated review processes represent an especially difficult challenge for obtainable (quality housing options at low and moderate price points) housing development. With a lower return on investment, obtainable housing projects suffer disproportionately from costs associated with regulatory processes and delay. Not surprisingly, fewer obtainable housing units are being built. According to the National Association of Home Builders (NAHB), an ever-increasing portion of the cost of a new home is attributable to the cumulative effect of these types of costs. On average, nationally, 25% of the cost of a typical home can now be attributed to these costs—everything from mandated studies to multiple site reviews, delays, permit and other fees, code requirements, etc.
In this landscape, communities that can distinguish themselves by streamlining these processes and removing barriers to investment will benefit now, more than ever. An efficient review and approval process will benefit not only the builder/developer, but the government and taxpayers of communities across the state by keeping housing affordable and expanding the local population and tax base. More families, more children and more homes equal more money for schools and local government. SCBJ