You Don’t Make Housing More Affordable by Making It More Expensive

Let me tell you something that shouldn’t need to be said: If you want housing to be affordable, you shouldn’t start by making it more expensive.

Nationally, approximately 5% of the cost of building a new home is attributed to regulatory costs. That includes permits, compliance with zoning rules, environmental reviews, fees, studies, and the time it takes to jump through bureaucratic hoops.

In my region? That number is over 20%.

Twenty percent. One-fifth of the price tag of a new home in my city goes not to materials, labor, or land. It goes directly to covering government-imposed costs.

Twenty percent. Not to build homes. But to regulate the building of them.

And here’s the kicker: my region, the one with the 20% regulatory cost premium? It was recently ranked the least affordable housing market in the United States.

Coincidence? I don’t think so.

That didn’t happen by accident. It wasn’t the inevitable outcome of market forces or migration trends. That statistic was built — one regulation, one fee, one subcommittee review, one bureaucratic delay at a time.

You see, we’ve built a system where we talk about housing affordability while regulating it out of existence. We ask developers to build homes people can afford, while simultaneously making the process so expensive and time-consuming that the only thing that pencils out is luxury housing. We say we want affordable homes, and then we treat the people trying to build them like Bond movie villains.

The permitting timeline alone can drag out for over a decade, full of appeals, redesigns, and downscaling to accommodate ever-changing public input. That doesn’t include the cost of delay or the risk premium added when a project might get derailed after millions have already been sunk.

And that’s before we even talk about the impact fees.

Every new home is assessed thousands (and sometimes hundreds of thousands) of dollars in Development Impact Fees, Traffic Mitigation Fees, Water and Sewer Capacity Charges, Wildlife Corridor Mitigation Fees, Fire Protection Fees, Public Art Fees, School District Fees, Stormwater Management Fees, Parks and Open Space Impact Fees, Tree Replacement Mitigation Fees…and the list goes on.

Each one may be reasonable on its own. But here’s the reality: they are NOT on their own. They stack. They compound. And put together? Impact fees can add six figures to the cost of a modest new home before a shovel even hits dirt.

And through it all, through the years of public hearings, workshops, protests, appeals, and redesigns, developers are paying.

They’re paying the mortgage on the land.
They’re paying workers to wait.
They’re paying escalating material costs.
They’re paying consultants, attorneys, planners, traffic engineers, civil engineers, environmental review teams, outreach specialists, and often a public relations firm to navigate the narrative.

And then everyone acts surprised when nothing gets built.

You can’t require 10 layers of approvals and still act surprised that nothing gets built. You can’t mandate affordability while adding fees that increase the base price of every unit. You can’t say yes to housing and no to every individual project.

But that’s exactly what we’re doing.

This is a region where planners discuss “housing options” and subsequently write zoning codes and adopt permitting processes that involve six rounds through the Design Review Committee, three through the Planning Commission, and then the City Council sends it all back again to “address neighborhood character.”

It’s a region where every housing conversation starts with a parade of public speakers demanding affordability and equity, and ends with those same speakers objecting to density, parking impacts, height, shade, traffic, noise, or the loss of their view.

And then we scratch our heads and wonder why no one builds “missing middle” housing anymore.

You can’t require a dozen layers of approvals and still pretend you’re pro-housing.
You can’t mandate affordability and tack on fees that increase the cost of every unit.
You can’t say yes to housing and no to every individual project.

But that’s exactly what we’re doing.

And we wonder why no one builds “missing middle” housing anymore.

We are engaged in performative policy-making. It looks good on paper. It checks the box. But the outcome? The outcome is that working families can’t afford to live where they work. Grown children can’t afford to move out of their parents’ homes. Teachers, nurses, first responders, and farmworkers are pushed further and further away from the communities they serve.

We can’t keep pretending the answer to affordability is more requirements.
More conditions.
More hoops to jump through.

It’s time to stop letting the regulatory tail wag the housing dog.

You don’t make housing more affordable by making it harder and more expensive to build.

If we’re serious about affordability, then we need to have an honest reckoning with what’s driving up the cost of building homes. And spoiler alert: it isn’t just greedy developers or market forces. It’s us – and the bureaucratic system we’ve built. Or more accurately, the system we’ve layered over and over again on top of itself until it became functionally unworkable.

We keep asking for and writing policies based on ideals.
We need to start DEMANDING policies based on outcomes.

Because right now? The outcome is failure.

And the people paying the price are the ones who can least afford it.

Because in housing, as in business, delay is cost.

And cost is exclusion.

Dagny is the author of The Dagny Chronicles on Substack