Maryland builders say regulations are pushing housing costs higher
Developers and state housing officials told lawmakers that regulations, fees, financing costs and delays are contributing to Maryland’s housing affordability crisis.
HERE'S WHAT WE KNOW
Developers told Maryland lawmakers that regulations contribute significantly to housing costs. Lori Graf cited a national estimate that regulatory compliance accounts for 26.4% of the cost of a new housing unit. Housing Secretary Jake Day said Maryland’s high housing costs come from multiple sources, including land, financing, fees, regulation and delays. Day said 42% of young renters are considering leaving Maryland because of housing costs. State officials say regulatory reform must be balanced with health, safety and environmental protections.
Maryland developers and housing officials are warning lawmakers that a complicated mix of regulations, fees, financing costs and development delays is helping drive up the cost of housing across the state.
During a House Economic Matters Committee hearing, Lori Graf, CEO of the Maryland Building Industry Association, said regulatory compliance accounts for about 26.4% of the final cost of a new housing unit nationally and suggested Maryland’s share could be even higher.
Maryland Matters independently reported the same figure from Graf’s testimony and noted that she described the regulatory burden as one reason builders say projects are increasingly difficult to make financially viable.
The larger issue, however, extends well beyond regulation alone.
Maryland Housing Secretary Jake Day told lawmakers that housing costs are driven by a combination of land prices, construction expenses, financing, taxes, fees, regulations and the time it takes to get a project from proposal to construction.
Day also said the state needs to balance efforts to lower development costs with protections involving the environment, public health and housing quality.
The affordability problem is increasingly affecting decisions about whether people remain in Maryland.
Day said 42% of young renters surveyed are considering leaving the state because of high housing costs, while 91% of full-time workers surveyed described affordability as a major or moderate obstacle to homeownership.
Graf also argued that even relatively small increases in the cost of a new home can eliminate thousands of Maryland households from the pool of potential buyers.
The debate now turns to which parts of the development process can realistically be changed.
Builders are asking lawmakers and regulators to reduce delays and unnecessary requirements, while state officials have acknowledged that streamlining must be balanced against health, safety and environmental protections.
That creates a difficult policy question: how much of Maryland’s affordability problem can be reduced through regulatory reform, and how much is driven by broader forces such as land, labor, materials, interest rates and financing?
WHAT IT MEANS
Maryland’s housing affordability problem is not being attributed to one single cause.
Developers are emphasizing regulation and delays, while state officials are acknowledging those burdens but also pointing to land, financing and construction costs.
The policy challenge will be deciding which requirements can be streamlined without weakening protections that lawmakers and regulators still consider necessary.
Original reporting referenced by Everything Frederick:
Maryland Matters — Reporting by Danielle J. Brown →Want more Frederick updates like this?
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