Buying a home should be one of the most special and memorable moments for a family. It signifies putting down roots and building towards a meaningful future.

But in Georgia, buying a home has become increasingly unattainable for hopeful homeowners.

Population growth, economic challenges, lumber costs, land costs, and a tight labor market have all contributed to Georgia’s high home prices. But as the Georgia Public Policy Foundation (GPPF) revealed in a wide-ranging report, overly burdensome government restrictions and regulations have made new homes unaffordable for too many families hoping to put down roots in Georgia.

Burdensome regulations equal high home prices

More building permits were issued in Georgia from 1995-2000 than were issued from 2010-2019. This, paired with Georgia’s decades-long population explosion has created a severe housing shortage in the Peach State. Low supply and high demand lead to increased prices. But what is causing the low supply?

That’s what GPPF set out to answer with their report “Government Regulation in the Price of a New Home.” The results were eye-opening.

GPPF’s president and CEO, Kyle Wingfield, explains,

The Foundation’s study quantifies the effect of laws on builders in Georgia. We surveyed dozens of developers and builders, [asking them] to estimate how much regulatory costs, whether from the federal, state, or local governments, contribute to the price of new, single-family houses they build.

The answer: 26.9% on average.

That’s right, more than one-quarter of the cost of a new home in Georgia is made up of government regulation and fees. That’s about 3 percentage points higher than the national average, and it represents tens of thousands of dollars to builders or homebuyers. Now, let’s be clear about one thing: The right answer here is not zero. One of the costs, for example, relates to utility hook-ups. If the builder or homebuyer didn’t pay for that, chances are taxpayers would find themselves on the hook instead. But almost 27% doesn’t really seem correct, either. […] Altogether, these various regulations would add $67,250 to the typical $250,000 home.

Georgia has been described as “ground zero” for burdensome architectural design standards like prohibitions on vinyl siding or four-sided brick requirements. Restrictions like these limit prospective homebuyers’ options and price blue collar and middle-class families out of many communities they otherwise would be able to afford. GPPF’s findings showed that architectural design standards increase Georgia home prices by 4.1%, which is higher than the national average of 2.7%. Also, over 71% of Georgia home builders are forced to deal with these mandates, the national average is 57%.

Georgia Public Policy Foundation promotes policies that lower home prices

High home prices from overly burdensome regulations have real impacts on communities. A 2019 U.S. Census report showed Atlanta grew by more than 660,000 new residents between 2010 and 2018 and ranked as the fourth-fastest growing metro in the nation. Meanwhile, the homes for sale in metro Atlanta decreased 24.2% from January 2021 to January 2022. This has tightened the housing market for prospective homeowners and made Atlanta the fifth-most overpriced housing market in the country.

But thanks to GPPF exposing the real data behind this problem, there’s hope for change. GPPF’s research has already been used by organizations such as the Georgia Chamber of Commerce, Georgia Association of Realtors, Home Builders Association of Georgia, and Habitat for Humanity to quantify the effect of policies they have been discussing for years. The report also provided baseline research for the 2022 Georgia House Study Committee on Regulation, Affordability, and Access to Housing. Additionally, GPPF has engaged in promising preliminary conversations with local officials in Chatham, Coweta, Fayette, and Whitfield counties who want to use GPPF research to reform their regulatory processes and reduce the burdens they impose on home builders.

“Georgians might not be able to affect lumber tariffs at the federal level,” said Chris Denson, GPPF’s Director of Policy and Research. “But they can ask questions of their local policymakers about the necessity behind regulations like bans on vinyl siding or window size minimums that drive up the cost of housing but don’t increase safety. There is a broad coalition across the political spectrum willing to ask hard questions and evaluate the drivers of housing costs and—more importantly—then enact the policies and reforms to truly make homes affordable in Georgia.”

For the last few years, Georgia families have been priced out of the housing market and forced to delay or abandon their dreams of home ownership. But thanks to GPPF’s work, Georgia’s leaders are being forced to address the state’s housing costs. Now, with the right reforms there’s hope that Georgia families will be able to afford the home of their dreams.