How Stringent Design Regulations Restrict Housing Affordability and Choice

Housing affordability has long been at the forefront of housing policy and attention. It's been even further ignited by the COVID-19 pandemic's effect on employment and people's ability to afford somewhere to live.

Recent land use trends — such as form-based codes (FBCs), planned unit development (PUD) and traditional neighborhood development (TND) overlay zones — provide additional development methods to make the residential development and regulation process more efficient. However, some localities are moving in the opposite direction by enacting burdensome residential design standards that go well past good design principles, and into regulation that increases costs, limits consumer options, prices out certain populations and raises a number of legal concerns.

NAHB's Residential Design Standards: How Stringent Regulations Restrict Affordability and Choice report addresses this issue. Included in the primer are examples of communities across the country that have attempted to implement these types of standards. Traditionally, design standards have allowed communities to control the physical characteristics of their housing stock, preserve community character, protect property values, and attract certain populations of home buyers and renters.

Common examples of highly prescriptive design standards include:

• Prohibiting or limiting the use of exterior materials such as vinyl siding and metal;
• Requiring specific and often expensive materials for siding and fences; and
• Dictating the amount of relief and surface area dedicated to windows and the number of architectural details on the roof.

In a 2019 survey, NAHB found that 47% of builders has encountered such standards; in communities where design requirements exist, 85% of respondents stated that they increased construction prices. Not only is this additional price passed on to home buyers and renters, but home buyers and communities also suffer from reduced production and choice.

The primer details the legal implications of these standards and efforts by local home builders associations (HBAs) and home builders to fight back. In several states, including Arkansas, Texas, North Carolina, Georgia and Oklahoma, these groups have successfully challenged these standards to limit or prohibit their adoption. Better tools exist for design that can influence residential design without limiting choice, affecting housing affordability or being exclusionary.

The fundamental issue is not the physical characteristics of homes, but what they can mean for affordability. Regulations that artificially raise housing prices without direct ties to public health and safety should not be prioritized over meeting the shortage of affordable homes for families. Housing affordability and attainability should be prioritized through effective planning tools, but unfortunately, barriers to the development process remain.

The primer is available through NAHB's Land Use 101 toolkit. For more information, and to be connected to other resources, contact Nicholas Julian, Program Manager of Land Use.