Trending Multifamily News
Regulation imposed by all levels of government accounts for an average of 32.1 percent of multifamily development costs, according to new research released today by the National Association of Home Builders (NAHB) and the National Multifamily Housing Council (NMHC). In fact, in a quarter of cases, that number can reach as high as 42.6 percent.
Apartment and condo development can be subject to a significant array of regulatory costs, including a broad range of fees, standards and other requirements imposed at different stages of the development and construction process. However, until now there had been no previous research done to analyze the extent of this regulation. This joint research effort surveyed NAHB and NMHC members to quantify how much regulation exists and how much it is adding to the cost of developing new multifamily properties.
Breaking down the government regulation costs showed that an average of 7 percent of regulatory costs come from building code changes over the past 10 years, 5.9 percent is attributable to development requirements (such as streets, sidewalks, parking, landscaping, and architectural design) that go beyond what the developer would ordinarily provide, and 4.2 percent of the costs come from non-refundable fees charged when site work begins.
“The home building industry is one of the most highly regulated industries, and the multifamily sector is particularly subject to these obligations,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “Housing affordability is a huge issue throughout the county, and this new research only further illustrates how the layers of excessive regulation translate into higher rents and reduced affordability for consumers.”
“The current regulatory framework has limited the amount of housing that can be built and increased the cost of what is produced,” said NMHC President Doug Bibby. “At a time when states and localities are struggling to address housing affordability challenges, public and private stakeholders should work together to streamline regulations and take the steps necessary to expand housing in communities across the country.”
Although local governments generally have authority for approving the development and adopting building codes, state and federal governments are increasingly becoming involved in the process and layering on additional levels of fees and regulations.
Developers can almost certainly expect average costs to be higher now or in the near future due to the effect of recent regulations that went in place at the end of 2017, such as the new Silica Rule. Further, the survey does not account for other price-influencing factors such as the effects of recent tariffs on building materials, or the extent to which local jurisdictions empower citizens to oppose multifamily development in their communities.
The full study can be viewed here.
Gainesville, Fla., June 20, 2018 – Franklin Street has arranged a $9 million loan for the refinancing of Addison Lane Apartments, a 316-unit multifamily apartment property located in Gainesville, the largest city in North Central Florida’s 14-county region. Casey Siggins and Ben Miller of Franklin Street’s Capital Advisors division secured the loan on behalf of the buyer, Florida Homes 7, LCC. The seven-year loan, arranged through a partnership with National Bank, has a fixed rate of 4.45 percent. Franklin Street’s Lonnie Kitchen provided insurance services for the asset.
Holliday Fenoglio Fowler, L.P. (HFF) announces the capital raise for The Vineyards of Brookfield, a to-be-built, 146-home, age-restricted (55+) townhome community with a total project cost of $58 million in the Long Island community of Center Moriches, New York.
Greystone, a real estate lending, investment and advisory company, today announced the May 30, 2018, closing with investors of the $750 million Greystone Senior Debt Opportunity Fund. The Fund is managed by Greystone’s affiliate investment adviser and includes several institutional and large public pension fund investors. The 8-year fund invests in debt financing across a range of commercial real estate properties.
TAMPA (June 18, 2018) – American Landmark
Boynton Beach, Fla. – Berkadia announces it has arranged $29 million in acquisition financing for Verona at Boynton Beach, a 216-unit multifamily asset formerly known as Aventine. Senior Managing Director Mitch Sinberg and Associate Director Matt Robbins of Berkadia South Florida, along with Senior Analyst Wesley Moczul of Berkadia’s Orlando office, arranged the loan on behalf of Robbins Property Associates, a real estate investment and development firm based in Tampa and Boston.