Regulations Drive Housing Costs Above National Average in Albany, New York

Written by:

Rudi Davis

Date:

30 Mar 2026

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Jeffrey Decatur, Licensed Associate Broker at RE/MAX Capital in Albany, New York, says New York State’s regulatory environment significantly increases the cost of building homes compared to other states, contributing to the persistent inventory shortage in the Albany market.

New York Regulations Raise Construction Costs

Decatur describes New York as one of the most heavily regulated and taxed states in the country, with requirements that directly affect housing development. Decatur points to permitting processes, compliance mandates, and administrative costs as the primary factors that make building in New York more expensive than in other regions.

“New York is one of the most overregulated, overtaxed, and red tape-burdened states,” Decatur says. Industry group campaigns have highlighted that it costs more to build a home in New York than elsewhere, primarily due to these regulatory hurdles.

This regulatory burden limits housing supply by making new development more costly and complex. When developers face higher costs and more delays, they build fewer homes. Fewer new homes reach the market, driving up prices and reducing affordability. Decatur argues that Albany’s inventory shortage is closely tied to these statewide regulatory barriers, which make it difficult and expensive to add new housing stock.

In the Albany, New York market, new construction accounts for only 10% to 15% of annual home sales, representing approximately 370 to 400 active listings at any given time. The median new construction home in the region is approximately 1,700 square feet, with three bedrooms and two and a half bathrooms, priced at roughly $550,000. By contrast, the average resale home in the Albany, New York area sells for approximately $300,000.

This price gap reflects both the higher cost of building new properties and the premium buyers pay for modern features and energy efficiency. It also indicates that many buyers are priced out of new construction, limiting the new supply’s ability to address broader affordability issues.

Albany Policy Talk Stalls on Housing

While state policymakers and industry advocates often cite housing affordability and regulatory reform as priorities, Decatur says there has been little progress beyond discussion. The lack of legislative movement suggests either insufficient political will or entrenched interests resistant to change.

“Housing affordability and making housing easier have been at the forefront of talking points, but nothing has budged or moved recently,” Decatur says.

Decatur is active in the Realtor Political Action Committee (RPAC) and the New York State Residential Real Estate Council, both of which focus on housing policy and regulatory issues. His involvement provides early insight into proposed legislation but also highlights the slow pace of change.

Decatur recalls learning about proposed regulations long before they became public, which allowed him to prepare and advocate more effectively. Several years ago, lawmakers considered restricting real estate agents to working only in the county where they lived. For Decatur, who lives near the borders of multiple counties, this would have sharply limited his business, even though three neighboring counties are within walking distance of his home.

Decatur notes that he has never visited the southern part of his own county, nearly an hour away, but would have been prohibited from working in nearby counties just a few miles from his home. Decatur and his colleagues lobbied against the proposal. The fact that such measures are even considered demonstrates the ongoing challenges within New York’s regulatory environment. These recurring proposals signal that the system remains resistant to more efficient market functioning.

Reform Needed to End Albany Shortage

State economists predict that Albany, New York’s, inventory shortage will last at least another two to three years. Without meaningful regulatory reform to reduce the cost and complexity of new construction, the shortage could persist indefinitely.

The link between regulatory costs and market outcomes is direct. High development costs mean fewer homes are built, which keeps inventory low and prices high. If state and local governments reduced permitting delays and regulatory requirements, developers could bring more homes to market, easing price pressures and improving affordability for buyers. Decatur notes that the legislative process is slow and that many entrenched interests benefit from the status quo.

For buyers and sellers in Albany, New York, and similar markets, limited inventory, rising prices, and competitive bidding will likely continue for the foreseeable future. Developers will continue focusing on higher-priced homes, where profit margins are sufficient to offset regulatory costs. For policymakers, the ongoing gap between public statements and measurable progress on reform highlights the difficulty of effecting meaningful change.

Decatur’s advocacy through RPAC and the New York State Residential Real Estate Council reflects an effort to address these issues from within the industry. His observation that “nothing has budged or moved recently” underscores the depth of the challenge. Without a significant shift in political will or regulatory philosophy, New York’s structural barriers to housing supply are unlikely to ease, and the state’s affordability crisis will remain unresolved.

Looking ahead, the Albany, New York market and the state more broadly will likely face continued pressure from high regulatory costs and slow housing production. Unless policymakers act to streamline development and lower regulatory barriers, the state’s housing shortage and elevated prices will persist, limiting options for both buyers and builders.