Home builders say industry in West Michigan on brink of crisis

Home builders say industry in West Michigan on brink of crisis

KALAMAZOO, Mich. (NEWSCHANNEL 3) - Homebuilders in west Michigan say we are on the brink of a crisis. The price of building regulations and materials have skyrocketed and builders say it could negatively impact the economy of our state. Existing home inventory is at historically low levels, and affordable new housing is virtually non-existent.

Scott DeLoof is the Vice President of Operations for DeLoof Builders LLC. He says business is great and his company is staying busy. However, he sees the writing on the wall for problems to come.

“The problems are the costs. I think they’re getting out of control,” DeLoof said.

DeLoof says a home he built in the West Haven development in Kalamazoo last year would cost him $65,000 more to build this year.

Jerry Whitaker is the president of the Home Builders Association of Western Michigan. He says there are three main reasons why homebuilders are struggling to build affordable housing.

“The first is delays by regulation. The second is the cost of regulation, and the third is the skilled labor shortage,” Whitaker said.

DeLoof, Whitaker, and others are sounding the alarm and say communities need to come together to find solutions. Bob Fika, CEO of the Homebuilders Association of Michigan, says new starter home construction is not economically feasible anymore.

“We're veering toward a cliff where availability for the average middle class citizen of our state is in jeopardy,” said Fika.

A new report released this month details what homebuilders believe needs to be done to fix the problem. The report says housing investment must now be looked at like any other type of economic development investment a community may need or desire.

“The world's changed and we want to make sure the community leaders understand that the homebuilding industry has changed, and they have to look at changing their practices,” he said.

Homebuilders want state and city leaders to consider the impact taxes, fees, and regulations have on home prices. Fika fears if they don’t, our state will lose out on economic development. The HBA says it wants communities and our state to consider implementing incentives or reduced regulatory costs for homebuilders, to help spur development.

“If we want companies to come here and bring jobs here, we need to make sure housing is available for the workers they hire,” said Fika.

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