Impact Fees

How soft costs — municipal fees, special districts, permitting delays, and NIMBY politics — quietly became a tax on housing. By ML Solutions Research Group · Published November 8, 2025 Ask a builder what killed a deal and you’ll hear about lumber, labor, interest rates, and supply chains — the hard costs everyone tracks. Spend enough time inside the pro formas, as we do, and a quieter line keeps turning out to be the thing that broke the math: soft costs. Municipal fees, special-district taxes, permitting delays, and the slow grind of local politics now add up to a real tax on housing, and in many markets it’s no longer a rounding error. NAHB puts government regulation at 23.8% of the final price of a new single-family home — 10.5% from development and 13.3% from construction.1 In Washington State, a 2025 analysis pushed that to 29.5%, roughly $203,976 on a $690,701 house.2 The 10–15% “regulation slice” a lot of us still carry in our heads has quietly moved into the 20–30% range. This sits alongside our work on rising hard costs and the changing labor market. Together, the three map how builders are getting squeezed from every direction at once.