America’s housing regulations helped create its own affordability crisis

Block by block, organization by organization, America has built its own housing crisis.

Experts say the problem is rooted in the foundation of the US housing system, a design flaw that has been decades in the making.

They point to three main forces causing the most damage: restrictive zoning, land-use barriers, and fiscal policies that have stifled supply and pushed prices out of reach.

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“There are many ways to stop and stop development,” said Joseph Gurko, a professor of real estate and finance at the Wharton School of the University of Pennsylvania.

“We’ve had very great success with that in the United States.”

Experts say this resistance to new construction is why restrictive zoning and regulatory barriers top the list of driving forces for America’s housing crisis.

The cost of regulations alone plays an enormous role in housing affordability, said Jim Tobin, president and CEO of the National Association of Home Builders.

“Regulatory burdens really add to the unaffordability index,” Tobin told Fox News Digital. “We estimate that 24% of the cost of a single-family home is included in regulations at all three levels of local, state and federal government. This amounts to approximately $94,000 in regulatory costs.”

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The Trump administration has faced increasing pressure due to the country’s worsening housing affordability crisis. (Mario Tama/Getty Images)

Some local governments intentionally restrict growth, adding time and cost to the process, he said.

“Sometimes there are communities that organize just because they want to hinder growth, and they don’t want to build more homes,” he said.

The longer builders wait, the more expensive those projects become, Tobin added.

“Time is money in real estate,” he said. “You own the land, you pay taxes, and while you wait for local approvals, costs continue to rise. Many communities then ask developers to install sewer, water, roads and electrical infrastructure, and it’s all rolled into the final price of the home.”

Economists say increasing housing supply is key to improving affordability. (David Paul Morris/Bloomberg/Getty Images)

Economists say these increased costs to builders end up pricing out buyers and stifling new construction.

The U.S. housing market will not recover until construction becomes easier and borrowing costs fall, said EJ Anthony, chief economist at the Heritage Foundation.

“The best way to thaw this frozen housing market is to cut government spending to ease pressure on interest rates and remove burdensome regulations,” he said.

He added that such steps “would in turn increase the production of new homes.”

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Economists and builders warn that the greatest risk is not just rising prices, but what prolonged unaffordability could mean for the next generation of homebuyers.

“The longer we delay ownership, the longer we delay creating wealth in this country,” Tobin said. “This is the challenge facing everyone now.”