Frustrated by the high cost of real estate? Government regulation is partly to blame.
Ever wonder why real estate is so expensive? Part of the problem is that the cost of government regulation is being borne mainly by the developers — who pass those costs on to buyers — rather than being shared more with the public.
No small number of politicians, businesses and industries complain that government regulations are overly obstructive, often ambiguous and even unnecessary, not to mention exceedingly costly in time and money. The real estate industry is no exception.
An extensive array of federal, state, county and municipal regulations — variously interpreted and enforced by regulatory officials — govern urban planning, land and infrastructure development, and building construction.
But simplistic political mantras and sweeping generalizations complaining about excessive regulation, heard frequently these days, obscure reality and contribute little to useful discourse about regulatory reform. Although some regulations indeed go too far and are too restrictive, many others are essential and undeniably effective. Thus, the challenge for representative government, and for those who write regulations, is striking the right balance between too much, too little and just the right amount.
Overly restrictive regulations can stifle creativity and yield unexpected, undesirable project results. In the District, for example, developers have been required at times to build more structured parking than needed; to preserve and incorporate obsolete structures arguably undeserving of preservation; and to plant trees in places environmentally ill-suited for their maintenance and survival.
Inadequate regulation, or lack of regulatory enforcement, can lead to negative and potentially dangerous consequences. Recurring hurricane damage to buildings along the southeastern coast is largely attributable either to insufficiently robust structural regulations, especially pertaining to roof and window wall framing, or to noncompliance with regulations that, if followed, would make structures more stable and safe.
Wisely conceived, mandatory requirements can serve public- and private-sector interests well. Yet demanding regulations should be complemented by well considered guidelines, options and recommendations that enable and encourage public- and private-sector discretion and flexibility.