Assuming that land and regulations historically equaled no more than 20 percent of a selling price of a house, Demographia, a St. Louis–based public policy firm, assigned to 11 markets a “Residential Land & Regulation Cost Ratio” to highlight how restrictive land policies are affecting home prices (see chart below).
Action Items
Wendell Cox, Demographia’s founder, believes the study’s findings can be useful to:
1 Civic and government officials, to evaluate the potential housing affordability impacts of proposed regulations;
2 Corporate relocation and recruitment departments, to identify locations with lower costs of living; and
3 Young adults, to identify where homeownership can be achieved eventually or quicker.
| Metro | Index* | Added Cost@** |
| Atlanta | 1.0 | — |
| Dallas/Fort Worth | 1.0 | — |
| Houston | 1.0 | — |
| Indianapolis | 1.0 | — |
| Minneapolis/St. Paul | 2.4 | $28,700 |
| Portlant | 4.7 | $59,300 |
| Raleigh/Durham | 1.0 | — |
| St. Louis | 1.0 | — |
| San Diego | 13.2 | $221,000 |
| Seattle | 3.9 | $51,400 |
| Washington | 5.7 | $74,700 |
* Represents the price of land and regulation compared to historic norms. The base index is 1.0.
** For a single-family, detached 2,150-square-foot house.
Source: Demographia
Learn more about markets featured in this article: San Diego, CA, Minneapolis-St. Paul, MN, Dallas, TX.
