The price of a home can be increased significantly by regulations and the regulatory
This increase may be a direct result of regulations requiring specific site
development or construction actions or it may have an indirect effect caused by delays
related to development review board schedules, requests for zoning changes, plan review
delays, permitting delays, etc.
Regulations (e.g., building codes, zoning codes, subdivision regulations) may be imposed
by a local jurisdiction for the purpose of
protecting the health, safety, and welfare of
This authority is granted by the Constitution.
Other regulations are imposed
to protect the environment, to maintain and enhance the aesthetics of an area, or to
preserve the quality of life through the availability of services and infrastructure.
these motivations are important and most would agree that they are legitimate
responsibilities of state and local government.
It is important to recognize that regulations, specifically the building code, specify the
to be met; they should not be considered as the ultimate goal for
design, development, or construction.
the building code should be thought of
as the minimum level of acceptable building practice.
A second important point to recognize is that studies have shown that regulations account
for as much as
35 to 40 percent of the cost of a home
The cost of complying with the
regulatory requirements becomes part of the price of the home that is paid by the buyer.
In the case of homes built to meet the affordable housing need in a community, this price
increase frequently eliminates many young newly weds from seeking their first home or
eliminates lower-income families from the pool of potential buyers.
Association of Home Builders (NAHB) estimates that every $1,000 increase in the price
of a home forces more than 500,000 families out of the housing market nationwide
When considering the impact on lower income families, the effect is disproportionately
Local regulations affect three areas of development costs and have a potentially large
impact on the total cost:
Raw land costs
represent 8 to 25 percent
of the cost of new homes and are
influenced by density requirements, restrictions on development on wetlands and
other protected areas.
Site improvement costs
represent about 10 to 20 percent
of the cost of a new
single-family home and are influenced by lot frontage requirements, and through
the labor, materials, and equipment requirements to meet site improvement
standards for infrastructure such as streets, sidewalks, utilities, drainage, parking,
and land dedication.