‘Screaming’ Real Estate Industry Slowed by Cumbersome Building Regs, Lack of Inspectors

Hurricanes and earthquakes in northern Michigan are about as likely as sharks in Grand Traverse Bay, but state building codes cover both natural events.

Current codes requires exterior walls to behurricane- and earthquake-resistant, a requirement that one local builder says adds days to the construction schedule.

“There’s a specific nailing schedule for wind resistance in exterior walls and then it must be inspected,” said Kendall Smith, owner of Silverwood Enterprises, a Traverse City custom home builder and remodeler. “We can’t put house wrap over it until after the inspection. It adds three to four days to the construction schedule.”

Cumbersome business regulations such as these are on the presidential radar.

“Any regulation that is outdated, unnecessary, bad for workers, or contrary to the national interest will be scrapped,” said President Donald Trump in March.

Officials in local real estate and construction say the number of rules and regulations can be aggravating, even “irrational.”

Beyond regulatory hoops, those in the building industry say a lack of government code inspectors available to sign off on construction projects slows projects down.

“It takes longer to get permits because there is a lack of people in the code offices,” said Judy Vajda, executive officer of the Home Builders Association of the Grand Traverse Area. “And there are not as many inspectors as there used to be.”

Those building near wetlands or dunes can expect further delays from the state.

“The [Department of Environmental Quality] has a tendency to create a lot of different issues,” Smith said. “And the response time from them is absolutely horrible.”

Smith and others said there is a lack of consistency across county lines on things like septic tanks can also slow construction and add costs.

“Grand Traverse County is pretty consistent in its enforcement policies,” Smith said. “But there are things we can do in one county that we absolutely can’t do in another county.”

Renovating historic buildings provides yet another special set of regulatory red tape. Rich Bergmann, a Charlevoix businessman who is renovating the long-vacant Boyne City Theater, said meeting modern building codes while maintaining the historic integrity of the building is proving to be problematic.

“It’s challenging bringing it up to code,” said Bergmann, whose company owns Lake Charlevoix Brewing Co. and Bridge Street Tap Room, both of which are in renovated buildings in Charlevoix.

Bergmann believes an excessive amount of business regulations are hurting economic growth in northern Michigan.

“There are too many regulatory agencies,” he said. “And they’re not on the side of businesses.”

Traverse City is also a hotbed of regulatory complexity.

Bob Rieck, a Coldwell Banker Schmidt Realtors agent who handles sales for Socks Construction in Traverse City, said city zoning regulations have become more complex and sometimes “irrational,” adding thousands of dollars to building costs.

That goes for the state, too.

“The Michigan building code book used to be a quarter-inch thick,” Rieck said. “Now it’s three inches thick.”

In spite of the difficulties faced by most of the building industry, there are a few that believe regulation has been a positive.

“Is [regulation] slowing the housing market? No. Housing is just screaming right now,” said Ryan McCoon, a principal of Endura Performance Homes in Traverse City. “No one was expecting it to take off as fast as it did in the past few years.”

That’s just fine with McCoon, who specializes in building energy-efficient homes using sustainable construction practices.

“Regulation is in the eye of the beholder,” he said. “It’s much more intense than it was 15 to 20 years ago. But in my view, it’s for the better.”