On January 7, 2008, HUD released a study that is the first to quantify, on a nationwide basis, the cost of excessive site development regulation on affordable housing. The objective of this study, conducted by the National Association of Homebuilders Research Center, was to determine whether subdivision requirements unnecessarily contribute to the cost of housing.
The study found that average cost of excessive regulation for a single dwelling unit was about 5% of the average cost of a new home and the average regulatory barrier cost for a one unit dwelling was $11,910. The total regulatory cost barriers in the U.S. for land and site development standards were $14.6 billion in 2004.
To generate these estimates, HUD commissioned nationally recognized land development experts to create benchmark subdivision standards on lot size, lot width, floor space requirements, roadway width, and many others. These benchmark standards were used to determine whether existing development standards were excessive.
The majority of communities in the study (94%) mandated one or more land development standard for residential subdivisions and 91% of all communities had one or more regulatory standard that exceeded the benchmarks. Communities most frequently exceeded the benchmarks for off-street parking, front setbacks, lot width and lot size. Excessive lot size regulations accounted for the largest percentage of cost (65%) due to the fact that land costs are a major component of housing costs. Furthermore, 65% of the communities exceeded the lot size benchmark by an average of more than one-seventh of an acre.
The report concludes that factors such as large lot zoning can prevent the development of affordable housing. The report is titled Study of Subdivision Requirements as a Regulatory Barrier and can be found here: www.huduser.org/publications/commdevl/subdiv_report.html