The cost of building homes is increased by the different fees required. There are the planning and construction fees and the fees associated with a variety of permits. These fees increase the cost of affordable homes. Some of the fees are explained here.
IMPACT FEES¹
Affordable housing developers must pay an impact fee to cities or other municipalities for providing new infrastructure to the community. The fee is used to pay for additional water and sewer systems, roads, schools, libraries and parks and recreation areas needed for the new residents in the area. Impact fees vary by location.
BUILDING PERMITS
Building permits are the way counties, towns and municipalities enforce their building codes. Local governments adopt these codes in order to ensure that all buildings meet minimum safety and structural standards. These can include an electrical permit, sewer/septic permit, and an occupancy permit. The cost can total several thousand dollars depending on the size of the development.
STORMWATER PERMITS²
Whenever it rains, stormwater runoff washes over the loose soil on a construction site and picks up pollutants like debris, chemicals, oils and dirt. This is transported to nearby storm sewer systems or directly into rivers, lakes or coastal waters. Construction sites need to have proper stormwater controls in place to protect the community’s clean water and surrounding environment. These controls are required with the permit that the construction company must purchase in order to build affordable housing.
REGULATIONS
The government regulations for building a house require many different permits and inspections at various stages of the construction. The builder must pay for the permits and the inspections. These costs are added to the price of the home.
Overall, the cost of government regulations accounts for 25% of the price of a new home.³ The regulatory amount includes costs associated with impact fees, permits, land development, construction codes and other financial costs required for the building of homes.
¹http://www.impactfees.com/publications%20pdf/dif.pdf
²https://www.epa.gov/npdes/npdes-stormwater-program
³http://nahbnow.com/2016/05/regulations-add-a-whopping-84671-to-new-home-prices/; https://mortgageorb.com/regulations-really-increase-new-home-prices-25-percent
