Brandon Leuallen, The Business Times 

Members of the City of Grand Junction’s Housing Affordability Task Force are asking the city to begin evaluating the cost impacts of major building and development code changes before they are adopted. The task force said affordability goals cannot be met without understanding how regulations affect housing prices.

The request was discussed during the task force’s most recent meeting, where members raised concerns that code changes are often considered individually without a clear way to evaluate how requirements compound construction costs over time relative to their perceived benefits.

Grand Valley developer Ron Abeloe raised the issue during the meeting and later elaborated on his concerns in an interview.

“The city on a regular basis comes up with requirements, changes to construction methods and details, and code changes with no regard for cost,” Abeloe said. “They make no effort to find out the kind of impact it would have.”

Abeloe said developers are often told the city cannot perform cost-benefit analysis.

Abeloe said, “But you don’t need a perfect analysis. You can take a typical set of assumptions and apply it.”

He also said industry professionals can provide numbers during the process if needed, so they are able to be considered.

As an example of what he described as an unnecessary regulation adding cost to each new home, Abeloe referenced a city requirement establishing a minimum six-foot-sidewalk width in residential neighborhoods that was also discussed at the meeting. He said staff did not provide a cost estimate, so he calculated one himself.

“That change added roughly four to five thousand dollars per lot,” Abeloe said. “That includes land value, additional subgrade preparation and construction costs.”

Abeloe said the sidewalk issue is brought up often, because in his years as a developer, sidewalks inside residential neighborhoods have rarely, if ever, created problems that justify wider standards. He said no one ever complained that sidewalks should be wider than four feet in any of his subdivisions. He said pedestrian traffic in subdivisions is low, conflicts between walkers are uncommon, and he has never seen complaints, lawsuits or demonstrated safety issues tied to four-foot sidewalks in neighborhood settings.

Abeloe said city officials at the time viewed the increase as insignificant.

“Five-thousand dollars on every home is a big deal,” he said.

Abeloe said when cost concerns are dismissed individually, the cumulative effect is also not considered.

“Each change is looked at as a small change,” Abeloe said. “But when you add them all up, it keeps adding to the cost of a home. It’s the cumulative effect.”

Abeloe said regulatory costs do not affect all housing equally. He said higher minimum standards disproportionately reduce the number of lower-cost homes that can be built by raising baseline construction requirements.

Abeloe said he builds homes at different price points, but he focuses significantly on the lowest price range for new construction in the Grand Junction area. He said regulatory costs tied to required infrastructure within developments have pushed many builders out of that segment, leading them to focus on higher-priced homes where profits per lot are larger, and requirements are easier to absorb.

“When you raise minimum standards, you raise the floor,” Abeloe said. “That hits lower-priced homes the hardest.”

He said higher-priced homes are also often built with added features voluntarily, because buyers in that market expect them and can afford them.

“For higher-end homes, a lot of these features are already being added anyway,” Abeloe said. “But for entry-level homes, those same requirements can make the project no longer pencil.”