The Hidden Rules Making Housing Unaffordable in America

For over 100 years, American urban planning has been devoted to layering on ways to effectively ban apartment buildings. Now, as policymakers scramble to fix our housing affordability crisis, they're discovering that zoning reform is just the beginning. The real obstacles are hiding in plain sight.

Even when cities legalize apartment construction, a labyrinth of building codes can make projects financially impossible before ground is ever broken.

Why Your Triplex Gets Treated Like a Stadium

Here's where things get absurd: in the US, any building with three or more housing units gets regulated like a commercial structure. That means a modest triplex faces the same building code requirements designed for "everything from apartments and offices to airports and stadiums," according to John Zeanah, Memphis's chief of development and infrastructure.

Single-family homes and duplexes fall under residential building codes. But add one more unit? Suddenly you're building a "commercial" project, even though it's obviously housing people, not hosting business meetings.

The result defies economic logic: multifamily construction costs significantly more per square foot than single-family homes in the US, the opposite of what happens in peer countries where economies of scale make apartments cheaper to build.

The Sprinkler System That Killed a Housing Project

Andre Jones, a small developer in Memphis, learned this lesson the hard way. He wanted to build fourplexes but discovered that mandatory sprinkler systems would make the projects financially unworkable.

The numbers are brutal. Commercial-grade sprinkler systems cost hundreds of thousands of dollars to install, plus ongoing maintenance expenses that can make or break small developments. Remember, we're talking about buildings that might have the same square footage as a large single-family home.

Here's the kicker: since 2009, new single-family homes have technically been required to have sprinklers too. But nearly every US state passed laws exempting single-family houses from that rule. Apartments? No such luck.

The Two-Stair Requirement That Shapes Our Cities

Almost every new apartment building over three stories in America must have two staircases. This fire safety requirement adds hundreds of thousands of dollars to construction costs and forces architects into inefficient designs.

To accommodate two staircases, builders typically create long hallway designs with apartments on either side. This pushes toward bigger buildings and reduces livable space. Meanwhile, European countries, Seattle, and New York City safely build single-stair structures that allow for more flexible layouts and better natural light.

Modern research shows these single-stair buildings don't have worse safety records. In fact, new multifamily homes are already significantly safer than single-family houses, likely thanks to their other fire safety features.

America's $500,000 Elevator Problem

The United States and Canada have the most expensive elevators in the world, sometimes costing three times what European elevators do. This isn't about superior technology—it's about regulation.

American elevators must be twice as big as European ones, large enough to fit a seven-foot stretcher lying flat plus a wheelchair's turning radius. European elevators accommodate wheelchairs and standing passengers just fine with side-mounted buttons and smarter design.

The seven-foot stretcher requirement was increased from 6 feet 4 inches about 20 years ago with minimal research. The cost impact was officially stated as "none"—a claim that looks laughably wrong today.

The Deeper Problem: Who's Really Writing the Rules?

This brings us to a troubling reality about American building codes. While zoning represents too much government control, building codes represent too little government oversight.

The US has effectively outsourced building code creation to the International Code Council, a private nonprofit influenced by homebuilders, materials manufacturers, and labor unions. "We've really outsourced this decision to, honestly, a group of lobbyists," says economist Michael Eriksen.

Government officials vote on these codes, but they're often asked to approve hundreds of technical changes they don't fully understand. The result? Rules that prioritize industry interests over housing affordability.

The Cost of Perfect Construction

Here's the economic reality: when you perpetually raise the cost of building something, it simply won't get built. Eriksen's recent research found that building code changes can add $169 to $279 in monthly rent to a theoretical two-bedroom apartment.

Many small-scale builders say code requirements make "missing middle" housing—duplexes, triplexes, small apartment buildings—financially impossible. When projects become unviable, they don't get built, which means their impact won't show up in housing price data.

Beyond Building Codes: The Full Picture

Building codes are just one piece of a larger puzzle. Property tax policies also stack the deck against apartments. Tennessee, for example, taxes apartment buildings as commercial property at higher rates than single-family homes—a clear subsidy for homeowners at renters' expense.

Some states are fighting back. Tennessee recently passed a law allowing small buildings up to four units to forgo sprinklers if they meet other fire safety standards. Housing advocates are organizing state-by-state reforms, though progress is inherently slow.