New construction housing in and around St. Paul is rare and expensive. Builders who want to make a profit build them large and expensive. The limited number of homes for sale continues to drive up housing prices. Normally we could build our way to a more affordable housing market. The supply of homes for sale could be increased by building more houses.
According to the non-profit Housing affordability Institute
A third of the cost of a new home in the Twin Cities comes from regulation and local policy.
Even without the added cost of all those regulations the price for new construction is unaffordable for most.
The study also concluded that “The Metropolitan Council’s growth boundary is unique to the region and has resulted in significantly higher land prices inside the established line. In concert with municipal land decisions, a land shortage has emerged which has a rationing effect in key areas, driving up prices. Land inside the Metropolitan Council’s growth boundary can be 3.8-12.8 times more expensive than comparable land outside of the boundary. In cities around the country that do not have urban growth boundaries, we do not see these kinds of price discrepancies.”
“State-level regulations, including the administration of federal rules, also affects affordability. Recently enacted state-level regulations in Minnesota have added more than $13,000 in costs per home.”
Regulatory costs make building permits more expensive. There are a lot of fees bundled into the permit.