The Impact of Regulations On New Home Building Costs
While President Donald Trump has run into plenty of controversy in a variety of areas, eliminating regulations on businesses is certainly not one of them in the business community.
His plans to strip away many regulations across a variety of industries, as well as not to add any more regulations, has spurred an explosion in private sector investment, according to the New York Times.
Called “The Trump Effect,” the new administration has led to “a wave of optimism” among business leaders and more investment in equipment, plants and even in pay for needed employees.
It’s also extended to the housing industry. For those interested in obtaining a builders’ license in Michigan, the potential for a bright future is strong.
Home builders frustrated with the regulatory costs associated with building new homes initially felt great optimism after Trump’s election.
They have good reason to want a change in government-imposed regulations on housing.
Government regulations account for 24.3 percent of the final price of a new home, according to the National Association of Home Builders. Of this, 14.6 percent comes from the higher price for the lot due to regulations imposed during its development. The other 9.7 percent is incurred by builders to meet regulations after purchasing the lot.
As pointed out by Granger MacDonald, former chairman of the NAHB, economists often use the housing market as a good barometer of where the economy stands. Given that, he encouraged lawmakers to take another look at the myriad regulations that inflate costs and slow housing growth.
But the faith in Trump became somewhat tempered by his elimination of the home mortgage interest deduction in his new tax plan. However, the NAHB eventually supported the bill, saying it would help put money in the pockets of middle-class families, maintain affordable housing and treat small businesses fairly “relative to large corporations.”
The recent State of the Union address by Trump received praise from the NAHB. Chairman Randy Noel pointed out that Trump made a point of praising the United States as a “nation of builders.”
Noel told Housing Wire that Trump’s call for more schools to train people in trades, including home building, will lead to a more robust housing industry.
“NAHB looks forward to working with the White House to continue to promote policies that will spur job and economic growth and promote homeownership and rental housing opportunities for all Americans,” he said.
What does all this mean for those interested in entering the building trade? It’s essentially all good news. An administration in Washington favorable to home builders and a renewed commitment to building in America make this an excellent time to earn your builders license.