Regulatory Costs Hold Back Entry-Level Housing Construction, Economist Says

The problem is more acute in California and New York, leading to underbuilding of affordable housing and resident outflows, NAHB chief economist says.

A view of homes and apartments in San Francisco, Calif., on June 13, 2018. Justin Sullivan/Getty Images

The United States is currently short millions of homes, according to various estimates. At the same time, with housing starts falling to their lowest level in six years in May, Robert Dietz, chief economist at the National Association of Home Builders (NAHB), recently predicted that 2026 will be another “down year” for new home construction.

He said many factors are impeding the pace of new homebuilding, but local legal and regulatory burdens are “the really big one,” particularly in states such as California and New York.