Economist: Housing regs up home prices in resort areas
summit daily news
FRISCO – Mountain municipalities trying to tackle affordable housing may want to look in the mirror for solutions. Elliot Eisenberg, an economist with the National Association of Homebuilders in Washington, D.C., said the myriad regulations and codes layered on over the years are a significant reason why homes in resort areas are so expensive. While market pressure from outside money certainly has its impact, Eisenberg said towns like Breckenridge, Frisco, Aspen and Vail that use subsidies to create affordable housing for local workers help create the affordability problem with rules that help drive costs up.
In Frisco to address the topic at a Monday night forum hosted by the Summit County Builders Association, Eisenberg pointed to what he called unintended consequences of building regulations imposed by local governments.
“The message is that they need to be aware of those consequences,” Eisenberg said. “We might disagree on some of the details, but let’s at least be cognizant of some of those negatives.”
Eisenberg said the biggest thing mountain towns and counties can do to address the problem is to go through the code book and toss out rules that either don’t make much sense, are out of date, or are just plain silly. Now, he said, is the perfect time to do it as the building industry adjusts in the wake of the recession and housing bust. Another thing municipalities can do is work to make land more available. Adding density to some lots, allowing taller buildings and other fixes would make builders and developers less worried about “running out of land,” he said. That, in turn, could lower lot prices and, thus, home prices.
Andy Webster, vice president of the Builders Association, said they invited Eisenberg to speak in Summit County because his take on regulations mirrors some of their own concerns.
“The building industry is a huge factor in the Summit County economy, and local governments need to consider the burden placed on us by these regulations,” Webster said. He added that the notion of additional fees for larger houses through the “TDR” – or transfer of development rights – mechanism could compel developers and home buyers to look elsewhere.
Eisenberg echoed that concern, saying that an appealing town like Frisco could lose its allure in the face of desirable areas of the country where housing costs are dropping. If someone simply wants a quaint mountain town to live in, he said, the West is full of them – many with less-stringent regulations he said weigh down builders.
The irony of codes and regulations helping to create the situation resort communities are trying to solve looms over the whole region, Eisenberg said.
“Why are we torturing ourselves under these Rube Goldberg programs?” he asked. “Let’s find ways to let builders build things they can sell. More regulations just create this strange ‘affordable housing’ world.”
Simply building more subsidized housing units, he said, was tantamount to cops issuing more traffic tickets: People are still speeding, and houses in the overall market are still too expensive. A real win, he said, would be to see prices drop relative to income. A good way to kick-start that, Eisenberg said, is to look at the costs of building government can help lower.
“The market’s quiet now,” he said. “We have time to think about how to rejigger these fees more logically.
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