US: Eliminating Regulatory Barriers To Affordable Housing

Introduction

HUD has developed this report on Eliminating Regulatory Barriers to Affordable Housing in response to the high cost of housing in many highly regulated housing markets throughout the United States that share a common concern: a lack of housing supply due to burdensome regulatory regimes. Because of the market imbalance, many American households do not have the opportunity to affordably rent or sustainably purchase their homes. In 2017, 37.8 million households (over 31 percent of all households) spent more than 30 percent of their pre-tax income on housing, with more than 18 million (10.8 million of whom are renters) spending more than one-half of their income on housing. A cornerstone of the Trump Administration’s economic policy is the tearing down of overly burdensome and unnecessary government regulations that hinder freedom and opportunity. The Administration’s economic policies, including deregulation, led to a booming economy, strong wage growth, and historically low levels of unemployment before the COVID-19 national emergency. The President’s deregulatory policies helped millions of Americans move up the economic ladder, particularly minority and low- and moderate-income households. Even in the midst of the economic renaissance, however, many American households continued to spend more and more of their hard-earned income on housing costs each month, which hinders economic opportunities for low- and moderate-income Americans and dampens overall economic growth, particularly in housing markets with low inventory.

The U.S. faces significant housing affordability challenges, particularly in regions where housing demand outstrips supply. A central obstacle is the presence of Regulatory Barriers To Affordable Housing—rules, zoning, codes, and processes that increase cost, slow timelines, or limit the types of housing that can be built. This report from HUD (2021) gathers stakeholder input and examines how Federal, State, local, and Tribal governments can identify, reduce, or remove these obstacles. The aim is to boost housing supply, ease cost burdens on households, and ensure more equitable access. HUD User+1

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What Are Regulatory Barriers To Affordable Housing?

Regulatory Barriers To Affordable Housing are laws, rules, or administrative procedures that unintentionally raise the cost of producing housing or delay development. They include restrictive zoning (such as minimum lot sizes, single-family zoning), height limits, parking requirements, convoluted permitting processes, impact or development fees, building and environmental codes, and other land use restrictions. These barriers often disproportionately affect low- and moderate-income households. GovInfo+2regulatorystudies.columbian.gwu.edu+2

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Why They Matter: The Housing Supply Gap & Cost Burdens

Due to Regulatory Barriers To Affordable Housing, many U.S. housing markets have under-supplied housing relative to demand. This shortage pushes up housing prices and rents. Statistics show that millions of households spend more than 30% of their income on housing; many spend over 50%. If supply constraints remain, affordability worsens. Eliminating regulatory barriers is seen as essential for reducing cost burdens and improving access. GovInfo+2HUD User+2

Regulatory Barriers To Affordable Housing also affect where housing is built: restrictive zoning often limits higher densities near jobs or infrastructure, exacerbating commuting costs, inequality, and environmental impacts. HUD User+1

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Federal, State, Local & Tribal Roles

Federal Actions

HUD identifies several ways the Federal Government can help reduce Regulatory Barriers To Affordable Housing. These include:

• Issuing guidance and technical assistance to states and local jurisdictions. GovInfo+1

• Reviewing and reforming its own regulations to ensure they don’t add unnecessary costs. HUD User+1

• Supporting research to quantify how much these regulatory barriers contribute to housing cost, and the effectiveness of reforms. GovInfo+1

State, Local & Tribal Actions

At the state/local/tribal level, stakeholders have implemented many reforms to address Regulatory Barriers To Affordable Housing. Key areas include:

• Zoning reform: allowing greater density, mixed‐use development, reducing exclusionary zoning. GovInfo+1

• Streamlining permitting and approvals: cutting review times, eliminating duplicative requirements. GovInfo+1

• Reducing fees and impact charges, or making them more proportional to development type. GovInfo+1

• Adjusting building codes or environmental review to be more flexible, removing outdated or overly strict requirements. HUD User+1

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Examples & Case Studies

Several jurisdictions have documented reforms addressing Regulatory Barriers To Affordable Housing:

• Some cities have reduced or waived parking minimums, or allowed accessory dwelling units, which lower costs. HUD User+1

• States have enabled zoning for missing middle housing types to counteract single-family zoning dominance. GovInfo+1

• Local governments have adopted faster permitting processes, including online systems, or pre-approved designs to reduce soft costs. GovInfo

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Impacts of Regulatory Barriers To Affordable Housing

• Delays: slower permitting and review processes increase carrying costs, interest payments, and uncertainty. GovInfo+1

• Cost increases: zoning and regulatory requirements can add significantly to total project cost—sometimes tens of thousands of dollars per unit. HUD User+1

• Reduced supply: when the cost or risk is too high, developers may choose not to build affordable housing in certain areas, leading to gaps in geographic equity. GovInfo+1

• Inequality: lower-income households and renters often face the worst burden, with fewer choices and longer commutes. Regulatory Barriers To Affordable Housing often reinforce segregation and limit access to opportunity. HUD User

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Recommended Strategies to Reduce or Eliminate Regulatory Barriers

Zoning & Land Use Reform

• Allow more housing types (multifamily, accessory dwellings, townhouses) in residential zones. HUD User+1

• Reduce minimum lot sizes, setback requirements, height restrictions that limit density. GovInfo+1

• Provide density bonuses or incentives in exchange for affordable units. HUD User

Streamlined Permits & Approval Processes

• Reduce or eliminate duplicative regulatory reviews. HUD User+1

• Accelerate environmental or building code reviews. HUD User

• Use digital tools or pre-approved plans to cut design and approval soft costs. GovInfo

Fee & Impact Charge Adjustments

• Make fees proportional to project size or impact. HUD User

• Waive or reduce fees for affordable housing or infill development. HUD User+1

Flexibility in Building and Environmental Codes

• Update building codes to reflect modern materials/methods. HUD User

• Evaluate environmental review to ensure it’s meaningful without being a delay or cost-driver, especially for smaller affordable projects. HUD User+1

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Federal Programs & Initiatives

HUD and other federal entities have launched programs aimed at helping jurisdictions address Regulatory Barriers To Affordable Housing:

• Technical assistance programs to help localities analyze and reform their zoning and land use codes. HUD User+1

• Grants to support mapping/digitization of zoning and land use, model codes, and streamlined processes. GovInfo+2HUD User+2

• Efforts to coordinate federal agencies’ requirements so that they do not impose overlapping or conflicting requirements. HUD User+1

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Role of Data, Stakeholder Engagement, & Local Context

• Engaging developers, builders, local governments, communities to identify which Regulatory Barriers To Affordable Housing are most burdensome locally. HUD User

• Collecting data: measuring how long permitting takes, how much fees cost, how codes cost in different markets. GovInfo+1

• Recognizing that different regions have different constraints; reforms must be tailored. Regulatory Barriers To Affordable Housing in a fast-growing coastal metro are different from those in rural or slow-growth areas. HUD User

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Potential Challenges & Trade-Offs

• Resistance from local governments or residents: concerns about change in neighborhood character, increased density, traffic, infrastructure strain. These attitudes often reinforce Regulatory Barriers To Affordable Housing. HUD User+1

• Environmental and health protections: balancing the need to protect environment/historic sites with making regulations efficient and affordable. Some protections may be necessary; the challenge is avoiding unnecessary costs. HUD User

• Fiscal constraints: local governments rely on fees, taxes, impact charges. Reducing fees for affordable housing may reduce local revenue unless compensated. HUD User

• Implementation capacity: many localities lack the staff, technical expertise, or policy capacity to reform their regulations or permit processes. HUD User

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Expected Benefits of Eliminating Regulatory Barriers To Affordable Housing

• More housing supply, which helps stabilize or reduce prices over time. GovInfo+1

• Faster project delivery, lower development costs, and more predictable timelines. HUD User

• Greater geographic equity: affordable housing in more neighborhoods, especially near jobs, transit, schools. HUD User+1

• Improved affordability: more households spending a smaller share of income on housing. GovInfo

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Recommendations & Next Steps

• Federal government should continue to support efforts via technical assistance, funding, models, guidance, data. GovInfo+1

• States, local, and Tribal governments need to review their own regulations, identify especially burdensome Regulatory Barriers To Affordable Housing, and prioritize reforms. HUD User

• Encouraging adoption of best practices: faster approvals, zoning reform, fees waivers or reductions, flexible building codes, density bonuses. GovInfo

• Monitoring and data collection: tracking outcomes over time, measuring cost savings, housing production, affordability. HUD User

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Conclusion

Regulatory Barriers To Affordable Housing are a major contributor to the housing affordability crisis in the United States. They add cost, delay, and limit what kinds of housing can be built. To address housing cost burdens and supply shortages, a concerted effort is needed: federal leadership, state/local reforms, stakeholder engagement, data-driven policymaking, and balancing other policy goals (environment, health, equity) with efficiency. The HUD report provides a roadmap: identify, reform, monitor, and replicate what works. Reducing or eliminating Regulatory Barriers To Affordable Housing can broaden access, improve affordability, speed construction, and ensure more equitable housing outcomes for millions of U.S. households.

Also Read: Fact sheet 9: What is Affordable Housing