Survey Highlights Barriers to Building Affordable Homes

The Harvard Joint Center for Housing Studies recently published a report called “A Home Builder Perspective on Housing Affordability and Construction Innovation.” It found that both single-family and multifamily home builders identify labor and building-material costs and availability to be the largest obstacles to building low-income housing. Seventy percent of builders find housing affordability issues to be a serious concern across the nation, and 75 percent find they are a serious concern in their market area. Findings are based on 290 responses from the HIVE Home Builder Survey distributed to home builders.

Multifamily builders reported an average cost increase of 19 percent over the past two years. Labor is identified as the largest barrier to building affordable homes, with 86 percent of multifamily builders rating the cost and availability of labor as “high importance” to the cost of homes built.

The greatest concern over the cost and availability of labor is in the West, with 87 percent of respondents rating it as important, compared to 81 percent in the Midwest, 76 percent in the South, and 64 percent in the Northeast. The cost and availability of building materials was identified as more important to building costs in the South and West.

Survey results also demonstrate that regulatory barriers add to the cost of building low-income homes, especially in metro areas. Seventy-five percent of multifamily builders rate the permitting/development approval process as a top concern and 83 percent of multifamily builders rate land/use zoning as important. Environmental regulations are also a concern for 67 percent of multifamily builders.

There has been little change in construction methods in the last 40 years, but results suggest that change is slowly coming. Sixty-nine percent of multifamily builders say there has been no, little, or moderate change to building construction methods in the past 40 years. Eighty-two percent of multifamily builders indicated they “stick-built” homes, the traditional building method, during 2017. Forty-six percent of builders indicated, however, that they would increase their use of innovative construction methods such as factory-built/modular, pre-cut, open wall panels, and closed wall panels over the next two to five years. Multifamily builders seem more likely to increase their use of innovative methods than single-family builders. And respondents report they believe there will be an increase in factory-built/modular housing in the coming years.