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The hidden tax that new home buyers pay in New Jersey is the cost of over-regulation by municipal, county and state government.   This adds an additional 20% - 30% to the price of a new home. 

 

The book Housing Costs: How Regulation Affects New Residential Development by Michael I. Luger and Kenneth Temkin explores the delicate balance between regulations designed to promote the production of sound housing in safe community environments and the red tape in which housing developers become entangled. Builders of new residential housing bemoan the regulatory barriers they confront--requirements and constraints that add thousands of dollars to their costs in delivering new units to the market. Less visible but equally damaging are what Luger and Temkin term the "opportunity costs of delay" that cause developers to lose critical momentum and mistime the market. Who ultimately pays the price: the developer or the home buyer?

 

The authors report on case studies undertaken in various communities in New Jersey and North Carolina to compare land-use regulations, regulatory authorities, and local development processes. Building upon their five-tier taxonomy of costs, they tease out the economic and social consequences of development regulations and show how variations in their interpretation and implementation can influence the bottom line. A literature review establishes the general issues surrounding regulation and housing, and chapters on regulatory process and practice in the case study states look at court decisions and environment regulatory bodies. Summaries of developer, planner, and engineer surveys provide perspective for understanding the concerns of various stakeholders in the development process. The authors conclude with policy recommendations to reduce regulatory costs without compromising regulatory benefits.

 

Order your copy of Red Tape and Housing Costs: How Regulation Affects New Residential Development from the Center for Urban Policy Research, a component of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University at http://policy.rutgers.edu/cupr/pressPHP/specification_details.php?id=235.

 

BLSJ members are eligible for a 50% discount off the purchase price of the book.