Residential Construction; Over-Reach and Over-Budget
“If the Government wasn’t involved trying to ensure that everyone could afford a safe, well-built home; everyone could afford a safe well-built home.” - Anonymous
The touchstones of the American Spirit; rugged individualism, innovation, and the pursuit of happiness, is are no better illustrated than through the inception and construction of your own home. Since the beginning our roots have been grounded in building, it defines us as a country. We have built, demolished, rebuilt, and always found better ways to do it, demonstrating the ingenuity and brilliance of those with vision, and carrying the country along with it.
The direct impact of residential construction on the economy is significant, contributing 5%-6% to GDP as it varies over business cycles. Additionally, New Housing Starts have led in the recovery of all six Postmodern Era Recessions. The reason is simple; new housing is the foundation of manufacturing in this country. Few industries are not related to the building of a house in some sense, from light manufacturing to trucking, title agents to real estate agents, and Architects to carpenters. A recent study indicates that for every sustained single New Housing start, 48 new jobs are created. Unfortunately, our best days may be behind us.
Until the Recession of 2008, the housing industry has almost been recession proof. Historically, as the build-sales cycle slows and it reflects on housing starts, the demand creates opportunity and the cycle starts over. The recent Recession has slowed new housing starts to a new industry low, the void created by ghost inventory and lack of qualified buyers has left the housing industry in the doldrums. When it comes to building, the industry has slowed, but the bureaucrats have not.
I was told by peer Architect, “The permitting is a painful process, so we charge like a Doctor”
In the past decade, Government overreach of residential construction has hit a new high and has stymied the industry with new regulations, federal laws and restrictions. For example:
Cabinet Manufacturing has been forced to use plywood with specific glue compounds, low VOC’s and high pitch finishes that drive up the price, while allowing cheap unregulated products from China to flood the marketplace.
A home owner is not allowed buy any window that fits their needs and budget, rather, the Federal Government via fiat is forced to comply with the International Energy Conservation Code that limits selection with SGHC ratings that drive budgets up.
Architects are forced by Building Code to comply by rather than common sense Design when it comes to solar innovation, material conservation, and non-sanctioned materials like rammed earth walls, hay bale insulation or light weight aggregate.
Do to increased compliance Design consultants must charge more for their services driving up the price to develop. 20 years ago the fee’s for construction documents for a median house (2500sf) was about $3000 with only one consultant to hire; that same house in now exceeds $16,000 with the coordination of no less than six consultants. This, a direct result of new demands foisted upon the industry by bureaucrats and regulations. In addition, permits and fees have increased, on the average, more than 22%.
“It is said a simple man makes things complex, a complex man makes things simple. The government makes it simply complex”
Home building is in the fabric of our society, American author, Ralph Waldo Emerson idealistically wrote, “Every spirit builds itself a house, and beyond its house, a world, and beyond its world a heaven. Know then, that the world exists for you: build, therefore, your own world.” When we remove plans, codes, liability, permits, regulations and all trappings associated with construction, at the heart of it all, a home is the soul of society. Unfortunately, over-reach by those who pretend to help is pushing that dream out of the reach of many.