The Wall Street Journal is reporting that entry-level home construction is being squeezed by so-called “impact fees” being imposed by municipalities across the country. Citing data from Zelman & Associates, they show that since the downturn builders have been cutting prices while cities have been increasing fees – often serving as a stealth tax to fill budget holes and make up for lost revenue. These increased costs have had the counter-effect of pricing entry-level buyers out of the market and the unintended consequence of pushing home prices above the FHA limits.
“Builders have faced other cost constraints besides permitting fees in recent years, including rising costs of labor, land and supplies. But for entry-level construction, “this is the No. 1 impediment right now,” says Ivy Zelman, the research firm’s chief executive.”
Click here to read “How City Hall Exacerbates the Entry-Level Housing Squeeze,” 5/5/16, WSJ.com
