You’ve noticed how high the prices of homes are, and you’re frustrated. Unfortunately, you’re not alone. So are many other millennials who are now realizing the sad truth that they may never be able to afford to own a home. 

Regulations at all levels

Did you know government regulations account for 25% of the final sales price of a new home in Washington? That’s nearly $125,000. These regulations come from all levels of government: city, county, state and federal.

Regulations include:

• Zoning approvals;
• Building compliance (such as fees and required studies);
• Building codes and standards that go beyond promoting the health and safety of occupants;
• Business compliance (licenses, insurance, bonds, labor);
• Open land requirements (meaning you can’t build homes there); and
• Taxes/fees during the purchase and sale transactions.

Overregulation is a real problem

While some government regulation is necessary, the rising costs of these regulations are a major limiting factor to the housing supply. This is particularly true for the entry-level market in need of inventory.

Lawmakers often add costs and fees to new homes to achieve other goals, like reducing homelessness or fighting climate change. But every $1,000 in added regulations means at least 2,500 more families in Washington won’t be able to afford to buy a home.

What can we do?

Local governments can help by taking the time to revisit regulations that impact the cost of constructing market-rate homes. The best place to start is to streamline the permit process and reduce impact fees.

We need to urge our elected officials to take real, bold action on reducing or eliminating unnecessary regulations and stop adding new ones. We need to remind them to consider any and all ways to reduce regulatory costs while maintaining compliance with laws and standards that influence health and safety.

We are in the midst of a housing affordability crisis. But we have the power to change things. Sign up to receive the Cut The Costs Action Plan with 10 easy steps you can take to change the course of home prices in Washington state.