Maryland builders told state lawmakers this week that government red tape is pricing ordinary families out of homeownership, with regulatory compliance now adding more than a quarter to the cost of a typical new home. The testimony landed as the state grapples with a housing shortage estimated at roughly 100,000 units, a gap officials say is pushing residents toward cheaper states and squeezing household budgets across Maryland.
Builders Put a Price Tag on Red Tape
Lori Graf, CEO of the Maryland Building Industry Association, told the Housing and Economic Matters Committee on September 15 that the 26.4% figure was a national estimate of regulatory costs that translates to Maryland and may be higher there, according to the Baltimore Sun. Graf said that for every $1,000 increase in the cost of a medium-priced new home, an additional 2,955 Maryland households are priced out of the market entirely. She urged lawmakers to cut back on the rules and review processes that slow approval of new development, arguing that regulatory delays compound the price problem.
The figures Graf cited to the committee track closely with a national picture. A June 2026 study by the National Association of Home Builders found that government regulations add an average of $131,734, or 26.4%, to the price of a typical new single-family home nationally, a 40% jump from $93,870 in 2021. That report also found building code updates over the past decade were the single largest regulatory burden, adding $40,288 per home, while $84,939 of the total burden occurs during construction and $46,795 during land development.
State Housing Secretary Says Balance Is Needed
Maryland Housing Secretary Jake Day, testifying the same day, told lawmakers that high housing costs stem from a combination of factors: land, construction and financing costs, taxes and fees, regulatory requirements, and project delays and uncertainty. Day said regulations remain a real hurdle for developers, but insisted that policymaking requires balance between speeding up construction and protecting the environment and housing occupants.
Day pointed to troubling numbers on how the housing crunch is reshaping who stays in Maryland. He cited data showing 42% of young renters are considering leaving the state because of high housing costs, and that 91% of full-time Maryland workers view affordability as a huge or medium obstacle to homeownership. Those figures echo a related state finding that roughly 33.3% of all Maryland households already spend more than 30% of their monthly income on housing, per the Maryland Department of Housing and Community Development.
Vesting Rights and a Housing Ombudsman
The Moore administration has been pushing legislation granting housing developers vesting rights, which would prevent projects from being delayed by new local policy changes made mid-construction. Supporters say the measure would give builders greater certainty and reduce both construction delays and development costs. It follows Governor Wes Moore's September 2025 executive order, Housing Starts Here, which established a state housing ombudsman to help developers navigate interagency permitting hurdles and set five-year housing production benchmarks for local jurisdictions.
Not everyone testifying blamed the same agencies. Republican Delegate Steven J. Arentz, who represents the Upper Shore, said Maryland Department of Health and Maryland Department of the Environment policies specifically hinder the building process. Day, for his part, framed the issue more broadly, saying regulations should protect both the environment and housing occupants even as the state works to bring down costs.
A Deficit State Officials Say Keeps Growing
The stakes were laid out in stark terms by the state's own numbers. Maryland's Department of Housing and Community Development estimated in its January 2026 Housing Production Targets report that the state needs 184,784 additional residential units by 2030 to keep pace with household growth. At current permitting rates of roughly 18,000 units annually, Maryland is on pace to deliver only 94,620 units over five years, meaning completions would need to nearly double to about 37,000 units a year to close the gap.
Frederick County alone was assigned a benchmark to add 19,525 residential units by 2030 under that same report. An October 2025 report from the Maryland Comptroller's Office linked the statewide shortage directly to net domestic out-migration, warning that residents leaving for lower-cost regions are causing measurable losses in state tax revenue, according to Conduit Street.
Where Past Efforts Have Stalled
This is not the first time Annapolis has tried to loosen local zoning restrictions to speed up construction. In April 2024, Moore signed the Housing Expansion and Affordability Act, which took effect in January 2025 and granted density bonuses for affordable housing near transit stations while capping local public hearings at two per project review. A more aggressive follow-up, the Starter and Silver Homes Act of 2026, would bar local jurisdictions from enforcing minimum lot sizes above 5,000 square feet, strict setback rules, or bans on townhomes in single-family zones.
The Maryland Municipal League and a coalition of Montgomery County municipal governments formally opposed that bill, arguing that state preemption of local lot size, setback, and design standards strips municipalities of the authority to manage infrastructure, public safety, and community character. Some jurisdictions have pursued their own fixes in the meantime: Montgomery County restructured impact tax timing in February 2025 to ease developer financing costs, while Anne Arundel County has pursued its own affordable housing trust fund and redevelopment rules aimed at chipping away at the statewide gap.
