Regulations are Making Housing Unaffordable

Fox News reports that the International Code Council, an organization that develops model building code policies, is finalizing its codes for 2024. Critics correctly argue that the new codes are a “backdoor climate initiative” and will add to the cost of new housing. As I explain in my book, The Affordable Housing Crisis: Causes and Cures, regulations, including building codes, are making housing unaffordable for low- and moderate-income households.One of the provisions in the proposed codes will require new single-family homes and townhomes to be wired for electric vehicle charging, include wiring to allow for solar panel installation, and be wired for all electric appliances. Undoubtably, the additional wiring will increase the construction costs of new housing. Home buyers will pay more for these features, whether the buyers want/need them or not. And this is true of many building codes. Indeed, a study by the National Association of Home Builders found that building codes enacted in the past decade have added 6.1 percent to the price of new housing. The total cost of regulatory compliance adds more than $93,000 to the cost of the average new home.At the same time, exclusionary zoning, and particularly single-family zoning, drives up the cost of land within a city. It is not unusual for an empty lot in desirable locations to cost $200,000 or more. This means that even before construction begins, the cost of a new home is unaffordable for low- and moderate-income households. Multi-family housing is similarly impacted by government regulations.Government’s response to the affordability crisis that it created is more regulations and programs. Rent control and inclusionary zoningforcing developers to offer housing at below market rates—are just two examples.The solution to the regulations that are making housing unaffordable is not more regulations. The solution is to repeal these crippling regulations and restore freedom to housing producers.