How Zoning and Housing Regulation Missteps Can Lock Out Potential Buyers

Mid-size, affordable cities are blossoming nationwide, but the pressure of a growing population is putting strain on the housing market in many of these new trendy locations. And the solution is not at all clear cut. Without regulation and rezoning, many potential buyers will be locked out of homeownership. But too many codes and regulations can elevate building costs and raise prices as well. And then there is that asterisk that is hanging over much of the home industry nowadays: the labor shortage. If builders cannot find affordable skilled labor, it would be tough to keep up with housing demand even if all other conditions were favorable.

As the home to a number of financial institutions, a bustling culinary scene and a unique cultural feel, the city of Charlotte has been economically successful and is the No. 1 spot for millennial relocation. Housing, however, is not able to keep up with demand, compounding the city’s housing affordability issues.

“We are very fortunate to be in a state that has seen continued growth,” observed Scott Farmer, executive director at the North Carolina Housing Finance Agency. “We have folks coming into the state each and every day, and that applies pressure to the lower-income households, more than to the middle or upper.”

The three biggest factors Farmer attributed to the development of affordable housing for homeownership and rental are construction costs, labor costs and regulatory requirements.

“In order to make a home affordable, you have to be able to control some of those aspects,” he added.

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