Are relaxed real estate development regulations becoming a bipartisan issue?
This month, the Trump administration, along with the Council of Economic Advisors (CEA), released a report on the nation's economy which cites regulatory hurdles as the main contributor to the housing affordability crisis.
The report limits the scope of this conclusion to 11 metropolitan areas, including DC and Baltimore, stating that constrained housing supply is caused by "excessive regulatory barriers" on the statewide and local levels. These barriers — which are cited as areas of reform like zoning, density maximums, parking requirements, and historic preservation, as well as more partisan issues like rent control, environmental and energy standards, and labor requirements — create an inelastic housing supply.
The report asserts that these regulations create a home price premium of 80% above housing production costs in the DC area, which ranks behind such areas as San Francisco (where it is closer to 180%) and Honolulu (where it is close to 160%). The report also calculates that homelessness in the DC area would be reduced by about 36% if excessive regulations were ended.
In a perplexing move, the CEA report omits high construction costs from the housing production equation, stating that high demand and constrained supply lead homes to be priced much higher than it costs to construct them. Meanwhile, some DC developers have cited the tariff-spurred increase in construction costs for delaying new development.
This report aligns with the Trump administration's housing plan, cemented when a council was established last summer to focus on removing barriers to affordable housing production (although there has been debate over whether its expected tactics will be effective in increasing affordability).
Other reportage (and some Democratic presidential candidates) have also suggested that dismantling some regulations could create housing price relief by adding to supply. DC Mayor Muriel Bowser has tied current efforts to amend the Comprehensive Plan to ambitious housing production goals and the need to create more affordable housing options in the city.
Thumbnail photo by Ted Eytan.
This article originally published at https://dc.urbanturf.com/articles/blog/excessive-regulation-causes-80-price-premium-in-the-dc-area-per-trump-admin/16517.
Most Popular... This Week • Last 30 Days • Ever
In this edition of First-Timer Primer, we look at the ins and outs of the 203k loan.... read »
Today, we highlight the five DC neighborhoods that have been the most affordable to h... read »
The national housing market has gained a tremendous amount of value in recent years, ... read »
In 2021, Property Group Partners received approval for the next phase of downtown DC'... read »
The nonprofit has filed plans with DC to rework one of its existing affordable housin... read »
With interest rates reaching their highest levels in 22 years, it is critically impor... read »
Plans have been filed with DC's Historic Preservation Office to convert the building ... read »
The change would allow for an 80-acre portion of DC's 272-acre Armed Forces Retiremen... read »
An application filed with DC this week signals the end is nigh for a McDonald's locat... read »
Madison Highland Live/Work Lofts has plans in the works to convert the 12-story offic... read »
With this weekend's DC houseboat tour a day away, UrbanTurf thought it only fitting t... read »
President Obama travels to Denver this morning to sign the stimulus bill that has bee... read »
In this week's installment of Ask An Agent, a reader wonders if there is a rule for h... read »
As The Wharf prepares to begin construction, DC's houseboat community heads to its ne... read »
In this week's installment of Ask An Agent, a reader asks a fairly common question th... read »
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Start browsing below!
Intro guides for first-time home buyers
Awesome and unusual real estate from across the DC Metro