Construction standards in the U.S. capital are changing to accommodate a growing number of new projects, according to new research from Axios.
The new construction rules will affect up to one million workers, with an estimated $150 billion in construction-related costs for each project.
“The new regulations could result in billions in new construction costs for both federal and private firms and hundreds of thousands of construction jobs lost,” said Michael Hager, a senior fellow at the Cato Institute.
According to the analysis, the new rules could result from a “march of anti-establishment sentiment that is growing in the Trump era, including increased support for anti-government sentiment among the public and an increasing willingness to pay for construction projects.”
The new rules will require that companies must obtain federal permits and obtain approval from the Department of Labor, the construction site’s operator, before building any new structure.
The new rules also will require a “minimum viable product” (MVP) to be built and include a minimum height limit, a minimum number of employees and a minimum cost per worker.
“Federal permits are the only way for construction firms to build in the country without needing to go through the red tape of local permitting,” Hager said.
With a “mandatory minimum” of $50 million for a project, the requirements will be “virtually impossible for private construction firms” to meet.
To be eligible for a construction permit, a site must have a minimum of 30 percent of the number of workers required by the city of Washington, D.C., to qualify for a local permit.
For projects with a minimum value of $150 million, a maximum of 60 percent of workers are required to qualify.
“The minimum value is actually the highest it’s been since 2010, which was the height of the dot-com bubble,” said Paul Taylor, an associate fellow at Cato.
“This is not the first time a city has required a minimum.”
The rule also will include a requirement that the builder “must not have had more than 1 percent of its workforce on the job for a minimum period of 10 years,” according to Axios, and “must maintain the minimum viable product and workforce in the city.”
For projects of less than $50 billion, the rules will only require that “the minimum value for each job must be less than the value of the building at the time of the project.”
For a project of more than $150,000, a project with a value of more the $150m will still require a minimum viable work product, but it will require more workers to complete the project.
“These new rules come at a time when the economy is suffering from a lack of capital investment, as companies and workers are cutting back on projects that will help create jobs,” said Taylor.
“The rules, if passed, will allow construction firms in Washington to build projects at a much lower cost and at a significantly faster pace than ever before.”
For the full analysis, see Axios report here.