Industry Report: Regulations Add 30 Percent to Multi-Family Development Costs

Two organizations representing the development industry have released a report to highlight the costs of doing business.

1 minute read

June 19, 2018, 7:00 AM PDT

By James Brasuell @CasualBrasuell


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"Regulation imposed by all levels of government (whether local, state or federal) accounts for 32.1 percent of the cost of an average multifamily development, according to a new study conducted jointly by the National Association of Home Builders (NAHB) and the National Multifamily Housing Council (NMHC)," according to an article on the NAHB's website.

According to the article, the report used a survey of multi-family developers from both organizations to build its conclusions. Over 90 percent of surveyed multi-family developers reported incurring hard costs during the approval processes. The article includes a graph breaking down the kinds of regulations that add costs to multi-family development.

Obviously, given the purpose of these two organizations in representing the interests of the construction and development industry, the findings should be considered with the proper frame. As noted on the website where the full report can be found, however, the only way to collect data on the costs of regulations is to survey developers.

The question of whether reductions in regulatory costs would be for public or private benefit remains.

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