Housing affordability often gets reduced to a few familiar factors: home prices, mortgage rates, construction costs and household income. But Jay Knight believes the conversation needs to start much earlier, with the rules that determine what developers can build in the first place. Jay Knight, a housing advocate and developer, joined host Carol Morgan on Atlanta Real Estate Forum Radio to discuss his new book, “Zoned Out: How Cities and Counties Make Homes Unaffordable.” The book examines how zoning, land-use regulations, permitting requirements and development standards can increase costs and limit housing choices. At the heart of Knight’s argument is a simple question: What constitutes an “affordable” home? Defining Affordable Housing The term “affordable” means different things to different people. For Knight, the concept is practical: A home should be affordable enough for a municipal employee to purchase using only their own salary. That includes teachers, police officers, firefighters and nurses, as well as workers in similar income ranges. What does that translate to? Knight believes the industry could produce a home for approximately $225,000 with 1,100 square feet, three bedrooms, two bathrooms, no garage and a 35-foot detached lot. The home would not offer every feature found in today’s larger new homes, but it could provide something increasingly difficult to find: an opportunity for a working household to become a homeowner. “That’s what ‘Zoned Out’ is for,” Knight said. “It’s to explain that homes are not expensive because builders will only build big, expensive homes on big, expensive lots. They’re expensive because the municipalities will only allow us to build big, expensive homes on big, expensive lots.” How Zoning Can Drive Up the Cost of a Home Zoning codes establish minimum lot sizes, density requirements and other development standards. But the written code often represents only the beginning of the process. Consider a hypothetical 100-acre property designated for two homes per acre. On paper, that could mean 200 homes. In practice, buffers, roads, stormwater infrastructure and other requirements can significantly shrink the usable acreage. Once a municipality calculates density based on the remaining land, minimum lot sizes can further limit the number of homes a developer can build. A property that initially appears capable of supporting 200 lots could end up supporting only 140. That change does not simply affect the number of homes. It increases the land cost assigned to every remaining lot. That additional cost eventually moves through the development and construction process and reaches the home buyer. Lot dimensions can create another layer of expense. A 60-foot lot could cost roughly $100,000, while increasing the width to 70 feet could add another $10,000. Once the developer and builder account for their own costs and margins, that seemingly small change could add $16,000 to $20,000 to the final price of a home. The result illustrates Knight’s broader point: Small decisions made early in the development process can have a significant impact on the price a buyer ultimately pays. Small Regulatory Changes Can Have a Big Affordability Impact The impact becomes even more significant when those costs affect a buyer’s ability to qualify for a mortgage. Using National Association of Home Builders data and extrapolating it to Georgia, Knight estimates that every $1,000 increase in a home’s price could cause roughly 4,100 Georgians to no longer qualify for that home. At $15,000, that increase could potentially put a home out of reach for approximately 60,000 Georgians. What Happened to Missing Middle Housing? Older neighborhoods often included a mix of housing types, from larger homes and smaller single-family houses to apartments, townhomes and other forms of “missing middle” housing. Modern zoning frequently separates those housing types into different districts. That division can limit housing options within a neighborhood and contribute to socioeconomic segregation, which separates people into different neighborhoods based on class and wealth. A home that sold for $380,000 a few years ago may sit next to a new home that costs $800,000 today. When regulations require new homes to match the size, lot dimensions and features of more expensive existing homes, the community can lose the ability to introduce more attainable homes. That does not necessarily reflect a lack of demand for smaller or less expensive homes. Instead, the rules may prevent developers from building them. Moving From Housing Problems to Housing Solutions ‘Zoned Out’ does more than identify challenges. Knight also outlines potential solutions, including reforms that could make the development process more predictable and bring lots to market faster. The Georgia Residential Land Development Council, which Knight helped form, recently worked on land disturbance permit reform. The effort took about 15 months and required legislative support, but the result was an important step toward reducing development costs and increasing the supply of buildable lots. More lots reaching the market could create downward pressure on land prices, which could help builders produce more attainable homes. Knight also advocates for by-right zoning, which would allow a development that complies with an adopted future land-use plan to move forward without another lengthy and uncertain zoning process. This approach could give developers more certainty while allowing municipalities to establish standards through their comprehensive planning process. Rethinking the Rules Behind Housing Affordability At its core, “Zoned Out” asks communities to look beyond the final price of a home and examine the decisions that shape it. Minimum lot sizes, density calculations, development requirements, mandated amenities, design standards and lengthy approval processes can each add costs. Together, they can make attainable housing increasingly difficult to build. The solution starts with recognizing that the current system does not have to remain the status quo. “It doesn’t have to be this way,” Knight said. “It’s just changing our mind.” That message extends beyond builders and developers. It challenges planners, elected officials and communities to consider how local decisions affect the people who live and work there. As the cost of housing continues to shape conversations across metro Atlanta and the country, Zoned Out offers another way to look at the problem: Before asking why homes cost so much, communities may need to examine what their rules allow the industry to build. Explore the Ideas Behind “Zoned Out” “Zoned Out: How Cities and Counties Make Homes Unaffordable” is available on Amazon in Kindle and paperback formats, with audio and hardcover editions planned for a later release. For more insights from Knight on zoning, land development, permitting reform and the future of housing affordability, check out this recent Radio episode. For more information about the Georgia Residential Land Development Council, visit GRLDC.org. About GRLDC The Georgia Residential Land Development Council (GRLDC) is a coalition of leading developers, builders and industry stakeholders dedicated to improving land development and permitting processes across Georgia. The organization advocates for policies that increase housing supply, streamline regulations and promote responsible growth. By working collaboratively with policymakers and industry partners, GRLDC advances solutions that help ensure Georgia can meet current and future housing demand. Podcast Thanks Thank you to Denim Marketing for sponsoring Atlanta Real Estate Forum Radio. Known as a trendsetter, Denim Marketing has been blogging since 2006 and podcasting since 2011. Contact them when you need quality, original content for social media, public relations, blogging, email marketing and promotions. A comfortable fit for companies of all shapes and sizes, Denim Marketing understands marketing strategies are not one-size-fits-all. The agency works with your company to create a perfectly tailored marketing strategy that will suit your needs and niche. Try Denim Marketing on for size by calling 770-383-3360 or by visiting www.DenimMarketing.com. About Atlanta Real Estate Forum Radio Atlanta Real Estate Forum Radio, presented by Denim Marketing, highlights the movers and shakers in the Atlanta real estate industry – the home builders, developers, Realtors and suppliers working to provide the American dream for Atlantans. For more information on how you can be featured as a guest, contact Denim Marketing at 770-383-3360 or fill out the Atlanta Real Estate Forum contact form. Subscribe to the Atlanta Real Estate Forum Radio podcast on iTunes, and if you like this week’s show, be sure to rate it. Atlanta Real Estate Forum Radio was recently honored on FeedSpot’s Top 100 Atlanta Podcasts, ranking 11th overall and number one out of all ranked real estate podcasts. The post Jay Knight’s ‘Zoned Out’ Examines the Hidden Costs of Housing appeared first on Atlanta Real Estate Forum.