Home Building Regulatory Cost Burdens Up Since 2021

The regulatory cost burdens of home building have increased 40% from 2021 to 2026, according to the National Association of Home Builders. 

“On average, regulations imposed by government at all levels account for $131,734, or 26.4% of the final price of a new single-family home built for sale,” NAHB notes. “Of this amount, $46,795 is due to a higher price for the finished lot, attributable to regulations imposed during the lot’s development.” 

“The remaining $84,939 is the result of regulatory costs imposed on the builder during construction, after the builder purchases the finished lot.” 

“Unfortunately, the situation is worse in Pennsylvania,” notes Andrew Kaye with Stephenson Home Builders, who works in the five-county area in Southeast Pennsylvania. “The Pennsylvania Builders Association recently completed a study that showed 29.5% of a newly constructed home can be attributed to regulatory requirements. This 29.5% of the cost of a new single-family home in Pennsylvania is attributable to regulation and translates to approximately $212,700 in costs.” 

Kaye, a past president of the PBA, says, “This far exceeds the latest NAHB findings that indicate 26.4% or approximately $131,000 of new single-family home costs nationally are attributable to regulation.” 

Gov. Josh Shapiro recognized this excessive regulation and noted in the Pennsylvania Housing Plan, “Without reform, these regulatory challenges will continue to suppress our housing supply, delay new units from coming online and adversely impact Pennsylvania’s ability to compete for capital and investment.” 

The NAHB data shows that the cost of regulation has climbed significantly in the last 15 years, with the average costs nationwide since 2011 being: 

• 2026: $131,734 
• 2021: $93,871 
• 2016: $84,671 
• 2011: $65,244 

“Regulatory costs are one of several factors, including record increases of tariff rates on building materials, ongoing skilled labor shortage, a dearth of available lots and tighter lending conditions, currently limiting the supply of housing – particularly housing for the entry-level market, where additional inventory is most needed,” NAHB says.