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).
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.
* 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.