What's Preventing More Homes from Being Built?

Wisconsin's housing shortage didn't happen overnight, and there isn't a single solution. A number of factors influence homebuilding, including land availability, labor shortages, financing, infrastructure, and one often-overlooked factor: the regulatory process that every new housing development must navigate before construction can begin.

Long before the excavator hits the ground, builders must work through zoning approvals, permits, engineering reviews, environmental requirements and other local, state and federal requirements. Many of these steps serve important purposes, but they also add time, cost and complexity to the homebuilding process.

The latest research shows that the impact of those requirements is continuing to grow. A 2026 study from the National Association of Home Builders found that government regulations now account for 26.4% of the price of a new single-family home, adding an average of $131,734 to the cost of a newly built home. That's an increase of more than 40% in just five years.

Wisconsin builders report many of the same challenges. A 2022 analysis by the Wisconsin Institute for Law & Liberty found that builders reported an average of 14 months from the start of the development process until construction could begin. The report also estimated that government regulations add almost $90,000 to the cost of the average newly built home in the Midwest.

When homebuilding projects take longer and cost more to complete, fewer homes are likely to be constructed. That means fewer housing options for buyers and a more limited supply for communities trying to meet growing demand.

There's no silver bullet for Wisconsin's housing shortage. But if we want to build more homes, every part of the development process deserves a closer look.