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Instead of the burden of paying for additional services to support additional housing being spread around to all residents, if you bake the cost into the permitting process, developers will be forced to charge more for the new housing to make up the cost.

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I guess we are not on the same page.

So, how does this work?

More specifically, what ensures the new development is "affordable"?

Surely, the deciding factor is not the permit cost.

As the supply increases, and a greater proportion of demand is met, the cost will decrease. Remember this from Econ 101?

Or build smaller homes 40k @ 6% is only 200$ a month. Further people would be paying this anyway and new development directly competes with normal home sales.

It may promote smaller homes, but that increases affordability.

How do you ensure it sells for $40k and the person that buys it lives in it (not renting or sub-leasing for a profit)?

Doesn't matter. The point is to push the inventory mix toward smaller dwellings. Someone who want a big house won't buy 5 little ones.

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