A recent story in The Wall Street Journal (WSJ) reminds me that the cost of regulation is higher than you think. Especially with housing. And while Missouri is not the worst offender—our housing prices are relatively low—we are not spared the costs of government policy.
In 2024 I pointed out that the new energy codes adopted by Kansas City all but brought new housing projects to a standstill. Kansas City wasn’t alone. The Journal noted in its recent story: “new building codes, particularly around energy efficiency and fire suppression, have forced builders to construct more complex and expensive homes.” Kansas City eventually reversed itself, but the point remains: Adding rules and regulations drives up costs.
A study published by the National Association of Home Builders and referenced in the Journal piece estimates “regulations imposed by government at all levels account for 26.4% of the final price of a new single-family home built for sale—up almost three percentage points from the percentage reported in the 2021 study.”
What does that mean in Missouri? The U.S. Census indicates the average sales price of new homes sold in the Midwest region was $430,400 in Q1 2026—26.4% of which is $113,626. The Kansas City Regional Association of Realtors reports a September 2026 new-construction median of $532,500 and an average of $635,913. If the regulatory burden in Kansas City matches the national average, the costs of regulation for each would be $140,580 and $167,881, respectively.
These rules and regulations often have nothing to do with health or safety, such as minimum lot sizes, setbacks and myriad approvals. They drive up costs and make affordable housing almost impossible to build. Missouri lawmakers have noticed.
When it comes to housing regulations, Missouri and Kansas are just two of a handful of states with no statewide housing code, leaving municipalities to regulate on their own. But the recent spate of city regulations led the legislature to consider halting some municipal rules. In 2026, House Bill (HB) 2384 would have stopped cities from imposing energy codes more strict than the 2009 standards, required local governments to approve building permits within 30 days, and legalized single stair apartments. The bill died in the Senate.
Another effort, represented by Senate Bill (SB) 1431 and HB 3466, would have created a single statewide building code, overseen by a new state commission whose approval cities would need before amending it. Both bills died in committee. But having the state set the standard is no guarantee of better outcomes. A single code written in Jefferson City can be just as costly as dozens written at city halls.
What the legislature did pass was more subsidies. In July, Gov. Mike Kehoe signed HB 3231. The bill creates Missouri Innovation Zones, where developers can get property tax abatements, tax-increment financing, and a new tax credit for converting offices to housing. How much help a project gets depends on a 100-point scorecard that weighs housing creation, affordability, historic preservation, and other factors. That’s one of the troubles with subsidies—politicians can’t resist attaching more rules to them. The result is a perpetual red-tape machine, churning out new policies and higher prices rather than new homes.
Missouri has been spared a lot of the awful land regulations that have driven up housing costs elsewhere. We should be grateful for that, but not complacent. Of this year’s proposals, HB 2384 came closest to the right answer: not moving regulatory power from city hall to Jefferson City, but limiting how much any level of government can add to the cost of a home. The question isn’t who gets to regulate—it’s how to regulate less.
