Jim Tobin, President and CEO of the National Association of Homeowners, told FOX News Digital that he expects the current rates of inflation, tax rates and other economic pressure points to affect home buyers and home builders.
Brick by brick, regulation by regulation, America is building its own housing crisis.
Experts say the problem is embedded in the foundation of the US Housing system, a design feature decades in the making.
They point to three major forces doing the most damage: restricted immigration, land use restrictions, and fiscal policies that have hit supply and weakened prices.
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“There are just many, many ways to stop and stop development,” said Joseph Gyourko, Professor of Architecture, “says Joseph Gyourko of architecture and finance at the Wharton School at the University of Pennsylvania.
“And we’ve gotten very, very good at it in the United States.”
Experts say regulations and red tape are holding up supply and driving up home prices across America. (Matthew Busch/Bloomberg/Getty Images)
That resistance to new construction, experts say, is why restricted construction and regulatory barriers are among the driving forces behind America’s housing crisis.
Jim Tobin, President and CEO of the National Association of Homeowners, said the cost of regulations alone plays a large role in housing affordability.
“Regulatory burdens really add to the Index being unaffordable,” Tobin told Fox Digital News. “We estimate that 24% of the cost of a single-family home is covered by regulations at all three levels of local, state and federal. That comes out to about $94,000 in regulatory costs.”
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The Trump Administration has faced mounting pressure over the affordable housing crisis. (Mario Tama/Getty Images)
He said some local governments are deliberately limiting growth, adding time and cost to the process.
“Sometimes there are communities that are just directing because they want to slow down growth, they don’t want more homes built,” he said.
And the longer builders wait, Thobin added, the more expensive those projects are.
“Time is money,” he said. “You own the land, you pay the taxes and, while you wait for local approval, the costs keep going up. Then many communities require developers to include SEANER, water, roads and electrical infrastructure and everything in the price of the home.”
Economists say increasing the supply of housing is the key to improving affordability. (David Paul Morris/Bloomberg/Getty Images)
Those rising costs for builders, economists say, ultimately put off consumers and discourage new construction.
EJ Antoni, chief economist at the Heritage Foundation, said the US Housing Market will not recover until construction becomes easier and borrowing costs come down.
“The best way to slow down this frozen housing market,” he said, is to reduce government spending to ease pressure on interest rates and regressive regulations.
He added that such measures “will increase the production of new homes.”
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Economists and builders warn that the biggest risk lies not just in rising prices, but in what the long term can get from the next generation of home owners.
“When we delay ownership, later we delay the creation of wealth in this country,” said Tobineni. “And that’s the challenge in front of everybody right now.”
