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REGULATION:
24.3 PERCENT OF THE AVERAGE NEW HOME PRICE
MORE
REGULATIONS PREVENTING
HOME AFFORDABILITY NATIONWIDE...
BY PAUL EMRATH - MAY, 2016
NAHB REPORT
A new NAHB study shows that, on average, regulations imposed by government at
all levels account for 24.3 percent of the nal price of a new single-family home built for sale. Three- fths of this—14.6 percent of the nal house price—is due to a higher price for a nished lot resulting from regulations imposed during the lot’s development. Theothertwo- fths—9.7 percent of the house price—is the result
of costs incurred by the builder after purchasing the nished lot.
NAHB’s previous 2011 estimates were fairly similar, showing that regulation on average accounted for a quarter of ahome’sprice. However,thepriceof new homes increased substantially in theinterim. Applyingpercentagesfrom NAHB’s studies to Census data on new
home prices produces an estimate that regulatory costs in an average home built for sale went from $65,224 to $84,671—
a 29.8 percent increase during the roughly ve-year span between NAHB’s 2011 and 2016 estimates.
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