In a world that’s changed since the industrial revolution, housing remains a constant. 

Shelter remains a basic human need, even before psychologist Abraham Maslow included it in his hierarchy of needs. The American Public Health Association considers housing a determinant of health, linking safe housing to healthier and longer lives.

Now that we’ve recovered, both locally and nationally, from the Great Recession and experienced the pandemic-fueled acceleration of demand for housing, our challenges also have evolved. Previously trending phrases like economic development and job creation are replaced with affordable housing, labor shortages and supply chain issues.

On the housing front, we’ll see tax dollars originally collected for infrastructure and emergency services shift to address housing needs. Municipalities have begun commissioning consultants to conduct housing studies and will start to look at code and policy changes to address affordable housing issues.

Although the most expensive housing we can build is new housing, that’s often the solution. Federal government agencies will send tax dollars back to communities in the form of grants, relief funds or tax-credit financing. Local governments will in turn “gift” tax dollars as fee waivers. 

Other solutions, such as inclusionary zoning, will increase the cost of new construction as a way to offset the cost of affordable housing.

The housing industry is a cornerstone of the economy and is measured and monitored by economists because of both the associated jobs and materials consumed in the process. It’s estimated an average home carries with it the labor equivalent of three full-time jobs, and 50 percent of the cost of a home is in materials. If we estimate just a $250,000 average cost per home in Mesa County, the total materials for 2021 exceeded $200 million with sales taxes on those materials going to local, state and federal coffers.

In addition to sales tax, builders pay a myriad of fees. For example, an average single-family home in the city of Grand Junction will require about $4,000 in impact fees; $2,000 in police, fire and parks fees; a building permit fee of around $1,500; a $500 stormwater permit fee, another $10,000 in water and sewer tap fees; and a $500 school land dedication fee. A newly created building lot comes with its own set of fees, including open space and park land dedication fees. 

Gaining approvals for a new subdivision often involves a years-long process that includes public hearings and many rounds of review, increasing both the time and cost of creating new lot inventory.

Ultimately, homebuyers pay for it all. 

The new construction market represented about 10 percent of sales in the local multiple listing service last year. Resales follow replacement costs — and in an environment of low inventories, they tend to follow more closely. Rental rates similarly adjust to accommodate the increased cost of housing. 

But existing homeowners remain unaffected by rising housing costs, right? Not exactly. As property values increase, tax assessments increase as well. All residents, not just homebuyers, are affected by the cost of new housing. 

If we’re going to tackle the issue of affordable housing, we need to also look at the affordability of new housing and ensure we have an efficient and fair delivery system.