Ratings for 11 United States Metropolitan Markets
In recent decades, an unprecedented variation has developed in the price of new tract housing on the
fringe of US metropolitan markets. Nearly all of this difference is in costs other than site preparation and
construction, which indicates rising land and regulation costs.
The first annual Demographia Residential Land & Regulation Cost Index estimates the price of land and
regulation for new entry level houses compared to the historic norm in 11 metropolitan regions.
Metropolitan regions in which land and regulation costs remain at or below normal have a Demographia
Residential Land & Regulation Cost Index of 1.0 (see “calculation,” below), while those with land and
regulation costs above normal will have an Index above 1.0.
The Demographia Residential Land & Regulation Cost Index estimates the extent to which more
restrictive land regulation has added to the cost of new housing in the included metropolitan regions. For
example, Minneapolis-St. Paul has a Demographia Residential Land & Regulation Cost Index of 2.4 (see
Figure 1), indicating that land and regulation costs are 2.4times the historic norm for that metropolitan
region. It is estimated that more restrictive land use regulation has added from nearly $30,000 (in
Minneapolis-St. Paul) to more than $220,000 (In San Diego) to the price of a new home.