Housing Impact Analysis
Housing has widely been recognized as an important asset to society, and experience has shown that many federal, state and local regulations affect the supply and cost of purchasing, owning or renting different types of housing. Current procedures require economically significant new federal rules to undergo a Regulatory Impact Analysis (RIA) that is generally based on a societal point of view. As a result, the RIA may not necessarily analyze how the rule affects housing costs from the standpoint of homeowners or occupants. This report describes how to prepare a Housing Impact Analysis (HIA) that quantifies the positive or negative effects of specific regulations on housing costs and affordability. The presumption is that the HIA would be performed as a supplement to the RIA.
The report is presented in four major sections and several appendices. Section 1 identifies numerous relevant federal and state regulations that affect housing and home building, and could merit detailed analysis. Section 2 covers the framework for quantitative analysis of the housing market including a discussion of underlying economic theory and review of selected articles. Section 3 presents information about when and how a preliminary HIA can and should be performed to screen a regulation and determine if an in-depth analysis is necessary. It goes on to illustrate this process for a series of housing-related rules from several different agencies. Section 4 describes a general process for in-depth analysis of how a rule affects the housing sector. It also illustrates in-depth analysis of two specific regulations: the EPA effluent guidelines for construction and development, and the HUD wind standards for manufactured homes. Additional background material on housing analysis data, dealing with uncertainty in estimated relationships and measurement of housing-related benefits, appears in the appendices.