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Report says regulations are pushing middle income housing off the market

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Housing industry officials say a new report sounds the alarm on industry trends that could price low and middle income families out of the housing market.

The report, from the Home Builders Association of Michigan, said 25 percent of the cost to build new homes comes from local and state regulatory fees. The report also said it is increasingly difficult to build a home for less than 300-thousand dollars.

Bob Filka is the CEO of HBA Michigan. He said the report is sounding the alarm about a trend in the housing market.

“We would normally build about 28-thousand homes a year. This year we will build about 16-thousand and we’re really reaching capacity. But we’re nowhere near what most economists would say we need in terms of housing production to meet the demands of our state.”

Filka said a smaller workforce, heightened fees, and longer wait times for permit approvals make moderately priced, middle income homes less attractive.

“If you’re in business and there is plenty of demand for higher end homes that provide a higher margin for profitability that’s where you’re going to invest your time and energy and resource.”

Filka said there are a number of ways local governments can work to attract building projects including removing new houses to access a municipal water system and providing land at low cost.