JMI Report: Local Impact Fees and Regulations Affect Housing Costs in Southwest Florida

On Thursday, the James Madison Institute (JMI) unveiled a report on how impact fees and land-use regulations impact Southwest Florida.

“Housing rents and home prices in many areas of the nation, including Florida, have increased much faster than the cost of construction since the 1990s, squeezing the household budgets of middle- and lower-income families,” JMI noted. “The authors of the study, Dr. Sam Staley, Dr. Adam Millsap and Vittorio Nastasi, through academic research, suggest that impact fees, land-use regulations, and permitting delays increase the price of houses, and that these increases are proportionally larger for smaller houses. A larger impact on smaller houses makes homeownership difficult for lower-income working families in these communities at a time when housing affordability is a major concern of government at all levels.”

Sal Nuzzo, the Vice President of Policy of JMI, weighed in on the study and its findings.

“What Reagan said many years ago still rings true, that the scariest words to hear are ‘I’m from from the government and we’re here to help.’ What we see time and again are ambitious and often well-intentioned government agents identifying a goal, affordable housing, and then creating policies that completely undermine that goal. The more they undermine it, the more bad policies they create. In the end, those at the lower end of the income spectrum suffer the most from overzealous local bureaucrats,” Nuzzo said.

Staley, one of the authors of the study and the director of the DeVoe L. Moore Center at Florida State University, weighed in as well.

“Florida is on the verge of another housing affordability crisis, and local regulations are playing an important role in making the problem worse,” Staley said. “Our research strongly suggests that workforce housing is being squeezed out by lengthy permitting delays and unwieldy permit fees in those areas that need it most. Impact fees were created by the state to fund infrastructure, but our research shows lower-income households suffer the most. Uncertain fees combined with a lack of transparency in the process are contributing to delayed housing development and higher costs, squeezing prices for those at the lower end of the affordability spectrum.”

Millsap, the assistant director of the L. Charles Hilton Jr. Center at Florida State University, offered his take on the study.

“Housing prices will continue to rise in Florida unless supply keeps up with demand. This means we need to build more, not less, but in many Florida communities zoning regulations like minimum lot sizes, height restrictions, and parking requirements get in the way,” Millsap said.


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