The legislation addresses several costs embedded in housing development. Faster environmental reviews, streamlined approvals, manufactured housing reforms, redevelopment initiatives, and incentives for local zoning reform can all help reduce barriers to housing production and improve affordability over time.

Those reforms matter because reducing delays, streamlining approvals, and removing barriers to housing development can help lower the costs embedded in housing production. However, they address only part of the affordability equation.

According to the National Association of Home Builders, government regulations add more than $131,000 to the cost of an average new single-family home, accounting for more than one-quarter of its final sales price. While the legislation addresses an important portion of those costs, many of the largest cost drivers remain in place. Building code escalation, impact fees, architectural design mandates, land dedication requirements, and development standards together account for more than $100,000 of the regulatory burden embedded in a typical new home.

For many families, those costs are not a policy debate. They are the difference between owning a home and continuing to rent.

The implications extend beyond individual households. Homeownership has long served as one of the U.S.’s most important economic multipliers. New home construction supports builders, contractors, manufacturers, suppliers, transportation providers, lenders, retailers, and countless small businesses. Homebuyers purchase furniture, appliances, insurance, home improvement products, and professional services. When homeownership becomes less attainable, the effects ripple throughout local economies.

For generations, homeownership has helped families build wealth, strengthen communities, and create opportunities for future generations. It also helped create stable communities and a more mobile workforce. As families established roots, businesses gained access to workers, local governments benefited from a stronger tax base, and communities were better positioned to attract investment. Housing was not simply a place to live. It was an important contributor to economic growth.

This is not an argument against regulation. Americans expect safe homes, responsible development, environmental stewardship, and modern infrastructure. Many of the rules governing housing development were adopted for legitimate reasons and have produced important public benefits. The question is whether decades of accumulated requirements, approvals, reviews, mandates, and fees have created a cost structure that is increasingly difficult for American families to afford.

Many individual requirements may be reasonable. The challenge is their cumulative effect. No single fee, review, mandate, or delay makes housing unaffordable. Together, however, they become embedded in the price of a home. The cost of delay becomes part of the cost of a home. The cost of a home becomes a barrier to opportunity.

The consequences extend far beyond individual homebuyers. When workers cannot afford to live near jobs, employers face a smaller labor pool. When families cannot afford to buy homes, economic mobility slows. When communities cannot attract and retain residents, growth suffers. Housing affordability has become a workforce issue, a Main Street issue, and ultimately an economic growth issue. As housing becomes less attainable, businesses face greater challenges recruiting and retaining employees, communities find it harder to attract talent and investment, and economic growth becomes more difficult to sustain.

Congress deserves credit for taking an important first step. The legislation will help increase housing supply and reduce some of the costs embedded in housing development.

But the larger challenge remains. More than $100,000 of regulatory costs continue to be embedded in the price of a typical new home. Those costs make homeownership less attainable, limit workforce mobility, and make economic growth more difficult to sustain.

MAMDANI WANTS AUSTIN HOUSING RESULTS WITH SOCIALIST RENT-FREEZE POLITICS

The American dream and economic growth have something important in common: both depend on attainable homeownership.

Congress addressed housing supply and some affordability costs. The next challenge is cost. Until the larger cost structure embedded within housing is addressed, homeownership will remain out of reach for too many families, labor shortages will become harder to address, and economic growth will fall short of its potential.

Dan Varroney is an economic strategist, founder and CEO of Potomac Core, and author of Rethinking Economic Growth.