Solving Housing Crisis with Regulations That Don’t Work
The Housing, Planning and Development and Insurance and Real Estate Committees held an informational forum Tuesday where they heard from a panel of economic experts about trends in the housing and real estate market with a focus on production and affordability.
Dr. Robert Dietz, Senior Vice President for Economics and Housing Policy for the National Association of Home Builders, provided the committee with the main reasons for the current increases in costs and housing shortage in Connecticut. Citing the cost of building materials, supply chain issues, inflation, liability concerns and the regulatory costs to build a home.
He stated that the cost to build a new home has gone up 35-40 percent since the start of the pandemic. Lack of skilled labor in the construction industry and lot shortages are also contributing factors in the housing crisis.
However, the biggest barrier to home inventories is regulation costs. He said, “legal and regulatory costs are 24 percent of a typical new single-family home.” Nationally the average regulatory cost is almost $94,000 per home but these costs are higher in more highly regulated areas like the West Coast and the Northeast.
Dr. Dietz also warned against, “reaching for policies that don’t work” in order to solve issues related to affording rent payments. He singled out rent control is a policy that, “99% of economists agree” does not work because it “acts as a tax on supply” and...
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