Multifamily developers are seeing their costs increase as a result of government regulation.

According to a new study from the National Association of Home Builders (NAHB) and the National Multifamily Housing Council (NMHC), federal, state, and local regulations account for 32.1 percent of the cost of a multifamily development

The study highlights the fact that local governments are especially aggressive with these regulations. According to the NAHB: “90 percent of multifamily developers typically incur hard costs of fees paid to local governments, both when applying for zoning approval, and again when local jurisdictions authorize the construction of buildings.”

Developers aren’t just contending with hard costs either. Over the past 10 years, changes in building codes have driven up “the cost of developing the property on average” by 7 percent. Many areas are adopting extra regulations too, like an energy conservation code, which in some cases are meant to benefit specific product manufacturers.

Many cities also require builders to conform to the same design as the communities they’re being built around, which impose added costs that a multifamily developer would not usually incur.

While the average costs sum to around 32.1 percent, one out of every four developments’ costs reach 42.6 percent.

As NAHB Chairman Randy Noel put it: “The home building industry is one of the most highly regulated industries, and the multifamily sector is particularly subject to these obligations.” That has major implications for a lot of Texas families.