Red states like Texas and Florida are attracting new residents by adopting pro-construction strategies that reduce housing costs, according to the CEO of the National Association of Home Builders.
Texas, Florida, and other rapidly growing red states are not only winning the migration race due to lower taxes and warmer climates but also by implementing an anti-regulation housing strategy that many high-cost states have resisted. As Americans and businesses continue to flock to these southern states, the challenge lies in whether these fast-growing regions can add enough homes and infrastructure to keep pace with the influx.
Housing industry leaders assert that southern states prioritizing new construction are better positioned to accommodate growth. In contrast, markets burdened by restrictive zoning rules, lengthy permitting processes, and other regulatory hurdles have struggled to increase supply and keep home prices manageable.
Jim Tobin, president and CEO of the National Association of Home Builders, emphasized the competitive advantage of this willingness to build. “Those economies are wide open. They are inviting more businesses, they’re generally low-tax states, and they’ve made housing a priority,” Tobin told Fox News Digital. “They’ve got the land and the will and courage to let builders build in those areas to meet the housing demand for those new jobs.”
This strategy is becoming increasingly vital as Americans continue to relocate from high-cost coastal markets to lower-tax states. While rapid population growth can strain roads, utilities, and public services, housing experts argue that states that pair infrastructure investments with homebuilding efforts are better equipped to accommodate newcomers without exacerbating housing shortages.
However, rapid growth brings its own challenges, particularly when infrastructure fails to keep pace with new development. “One of the main complaints is that infrastructure does not keep up with that influx of population or housing growth,” Tobin said. “States that find themselves ahead of the curve are planning those two critical components, infrastructure and housing, together and are going to be better prepared for growth in the future.”
Even states that have prioritized homebuilding face cost pressures that can drive up home prices. According to the National Association of Home Builders, government regulations account for approximately 24% of the cost of a typical single-family home, adding nearly $95,000 to the average price of a new house. For multifamily housing, the burden is even greater, with regulations accounting for roughly 41% of the cost of a typical apartment or multifamily unit, highlighting the significant impact of government rules on housing affordability.
The rising costs have drawn renewed attention from policymakers in Washington, who are searching for ways to increase housing supply and improve pricing. Tobin pointed to a bipartisan housing package currently moving through Congress that aims to encourage local governments to reduce regulatory barriers to development and adopt policies that facilitate the construction of new housing.
This legislation comes at a time when housing affordability remains a pressing concern for many Americans, with elevated mortgage rates and limited inventory making homeownership increasingly out of reach for first-time buyers. The issue has also gained greater political significance ahead of the midterm elections, as voters continue to rank the cost of living among their top economic concerns.
“The answer to the housing crisis in the country is more supply,” Tobin stated. “This bill will absolutely help us build more supply affordably,” according to Fox News.