LAKE WINNEBAGO, Mo. — The Home Builders Association of Greater Kansas City is attributing regulatory burden from local municipalities as a leading strain on the new housing market.
"The median price of a new home in the United States, 23.8% of that cost is due to regulatory compliance," said Will Ruder, executive vice president of KCHBA. "We are seeing a 360-degree development pattern within the KC metro; north, south, east and west. This is a place that has a lot of really good stuff going on."
According to Statista, the Kansas City area has added over 200,000 residents from 2010 to 2023.
Ruder told KSHB 41 the local development scene has not kept up with demand.
"It is causing enormous housing strains," he said. "There is a lot of opportunity to buy here, but we are not building enough, or fast enough, for all the good things that are going on in Kansas City."
Justin Pfeifer is a home builder with Pfeifer Homes Inc., and was showing off a home on the shore at Lake Winnebago during the KCHBA Parade of Homes event.
"Home ownership, I feel, is a very beautiful thing in our lives," Pfeifer said.
Rising cost of production has put tremendous strain on the industry. Those costs trickle down to home buyers.
"Our price 10 years ago would be in the $650,000 to $850,000 range," Pfeifer said. "Now. that’s $950,000 to a million- and-a-half, with the cost of construction. Also with the cost of development with what the lots are costing these days," he explained.
Pfeifer allowed KSHB 41 to visit its model home in the Lake Winnebago development. The $1.3 million home has four bedrooms and four bathrooms, a downstairs bar/kitchenette and a corner deck with a fireplace.
Some buyers may gulp at the listing price , but Pfeifer attributes that partially to the approximate $200,000 price tag on the lot. The cost of land in developments across the metro have increased.
Additionally, there are price factors that can't be seen while making dinner in the open kitchen design. It's hidden beneath the floor boards.
"As a builder, I've decided to use a higher end product in the floor system," he said.
That floor system allows for their housing model to have an open floor design both upstairs and downstairs.
Lake Winnebago's municipal building code forces Pfeifer to input additional building methods to meet local regulations.
"It [building code] doesn’t allow the buyers to pick and choose what is most important to them in their homes," explained Pfeifer.
Certain building regulations take money out of buyers wallets, according to Pfeifer, taking freedom away from what they value in their homes.
"Ultimately, those costs trickle down to the buyer," he said. "And the return on investment over the years isn't there. Some of the things that we’re seeing in the new codes nowadays, these buyers are going to have to live in these houses 30-40 years to basically be able to overcome that."
It's why the KCHBA started the 'Let Builder's Build' campaign to advocate for the home building industry and its buyers, encouraging residents to get involved with local governments and paying closer attention to building regulations.
"If overall, nearly a quarter of the purchase price is due to some form of regulatory compliance, should we not do an assessment and evaluation to see if those are appropriate?" Ruder asked. "The more people that own their roofs over their heads, the stronger communities are."
The KCHBA said the Kansas City area is not meeting the current demand for homes built . They predict the metro area will be 60,000 homes short over the next decade.
Their solution? Cutting red tape and create a more affordable supply.
