According to a recent study conducted by NAHB, regulations imposed by all levels of government make up for $93,870 of the current average sales price of a new single-family home, which is $397,000. That equates to nearly 24%. Of the nearly $94,000 in costs, $41,330 comes from regulation during development, while $52,540 is from regulation during construction.
This study illustrates how overregulation is exacerbating the nation’s housing affordability crisis and that policymakers need to take bold steps to reduce or eliminate unnecessary regulations that will help builders increase the production of quality, affordable housing to meet growing market demand,” said NAHB Chairman Chuck Fowke.
One thing worth mentioning is that the study does not take into effect how rising material prices over the past year have caused a dramatic spike in housing costs. In a separate report released last month, lumber prices soared over 250% since April 2020, adding $35,872 to the price of a new single-family home. NAHB says that this figure is on top of the $93,870 cost due exclusively to regulation.
“While NAHB’s previous regulatory estimates in a 2016 study were fairly similar, the price of new homes increased substantially in the interim. When applying these percentages to Census data on new home prices, the data show an estimate that regulatory costs in an average home built for sale went from $84,671 to $93,879 — a 10.9% increase during the five-year span between NAHB’s 2016 and 2021 estimates,” read the article.