Regulatory Barriers and Fees

Land Development
Contact: Nicholas Julian
(202) 266-8309

Land Use Regulatory Barriers

In the quest for creative solutions, less glamorous but often more important factors of housing costs are often overlooked. In fact, if there is one silver bullet to improve housing affordability, it is probably not found in a new program or subsidy or type of mortgage. Instead, it is more likely to be found among the practices, processes and regulations to which virtually every house built in the United States is subject.

The land development review and approval process is an important component of the risk and expense of a housing development project. In many areas of the country, development approvals have gone from taking a few months to two years or more (sometimes many more) years to obtain. This lengthy process is often also unpredictable and ties up builders’ capital and accumulates interest expenses and other carrying costs before even one shovelful of dirt is moved. Fees assessed on development also add directly to the cost of housing and often do not reflect the actual impact of the housing development on the community.

These costs add significantly to the overall expense of housing for potential homeowners, often without a commensurate benefit in return for the expense entailed, and can even affect the very feasibility of a development project.

In addition, the land development review and approval process often consumes a great deal of builders’ time. Much of the frustration related to land development review and approval involves the complexity of the process and the lack of information about what the steps are, what documents need to be provided at each step, and how long each step will take. The fact that most builders work in multiple jurisdictions, each typically with different processes and requirements, compounds the problem.

Lengthy and complicated review processes represent an especially difficult challenge for affordably priced housing, fundamentally affecting who can afford to purchase a home. With a lower return on investment, affordable housing projects suffer disproportionately from development fees and costs associated with regulatory delay. As a result, fewer affordable housing units are built.

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