[Editor's note: This article is one of an ongoing series of special features focusing on Housing Innovation, in partnership with Ivory Innovation's and its House Party podcasts. To hear the podcast, click here.]

Executives of D.R. Horton guided last week to 11% land cost inflation it expects will factor into its 2024 financial performance. That outlook raised eyebrows.

One senior research analyst, Truman Patterson of Wolfe Research, called out the red flag in a later report.

Importantly, we believe the +11% YoY land inflation outlined on the company’s 4Q conference call needs clarity. In part, the +11% was impacted by geographic mix shift away from the SE and SC regions, which provided negative optics. Apple-to-apples, we believe core 4Q land inflation was running at a MSD-to-HSD pace, which likely remains at an elevated rate in ’24." – Truman Patterson, DHI, Notes From the Road

Mix shift or not, land and residential building lots are not only the homebuilding and development's precious resource "they're not making any more of," but also the very one 30,000 U.S. localities happen to make a common practice of making less of.

Further, added to a steady-state "black box" nature of so many local zoning and land use conditions, stipulations, and restrictions, has been a protracted post-pandemic local jurisdictional version of Long Covid. Namely, that the decimated ranks of local planning and zoning officials have not been able to catch back up with processing, assessing, and approving entitlement applications, development plans, and local growth initiatives.

It's one of housing's age-old challenges coming smack up against topical forces – such as a tremendous surge in Millennial and Generation Z adults forming households, income-growth, and families now and through the next decade or more against a generationally-constrained supply of new and resale homes – as a driver of double-digit land cost inflation running into 2024 and beyond for the nation's No. 1 homebuilder by volume.

Which is a big reason to click here and listen to Ivory Innovations' Chief Innovation and Strategy Officer Jenna Louie's conversation with Sara Bronin, a Mexican-American architect, attorney, professor, and policymaker whose interdisciplinary work focuses on how law and policy can foster more equitable, sustainable, well-designed, and connected places. Bronin, as you may also remember from an earlier profile we did of her here in The Builder's Daily, is director of National Zoning Atlas, a mind-numbingly ambitious national initiative to decode and make plain what's currently locked up in each locality's zoning and land-use genetic make-up.

We consider the National Zoning Atlas a project to digitize, demystify, and to democratize zoning codes," Bronin tells her host Jenna Louie. "What we mean by that is we want for people to understand these invisible rules that shape their environment."

Doing that, even for a single jurisdiction, let alone a whole state worth of hundreds of municipalities, and a whole nation, with 30,000 or so municipalities with local zoning and land use guidelines that seem in so many cases almost intentionally designed, recorded, and memorialized to cause developers to stumble, grumble, and ultimately, give in ... it's no mean feat.

We rely on teams from all over the country to fan out across zoning jurisdictions and collect first the zoning code and zoning map," Bronin explains in the Ivory Innovations House Party podcast conversation with Jenna Louie. "Then the teams put those together in our online repository, and then dig into them and start figuring out what the zoning code text says, and to assess the maps to translate those into GIS files to which the regulatory characteristics can be tied. And so we do that through GIS files that are tied zoning district by zoning district to a massive spreadsheet, that zoning code text analysts create on the back end, and then merge those two together to produce the map."

The question, of course, may be why go to all that trouble, and what does all of that effort and time have to do with double-digit land inflation, housing attainability for emerging households and families?

We wrote in our earlier profile of Bronin and the 2023 Ivory Prize winner National Zoning Atlas:

If the U.S.'s 30,000 localities with their own bespoke zoning ordinances were able to be transformed from a teeming ocean of discrete local belief systems into a coherent knowledge base of relational data, characteristics, and impacts on local economics, safety, health, quality of life, housing access, community sustainability, and other values how might that alter things?

Would the knowledge impact policy, community advocacy, economic diversity, and trajectories of risk or resiliency?

Evidence suggests a U.S. zoning single-source-of-truth could lead local, regional, and state stakeholders to new and different opportunity areas, both from a recognition of comparative zoning practices and their ties to economic and resiliency outcomes." – The Builder's Daily

Solving this riddle, in fact, is at the root of why Sara Bronin – a renaissance-level next generation talent committed to solutions-seeking housing's hardest chronic challenges – got into housing in the first place.

I've always been interested in the way that buildings are built and the effect that they have as a group on our experience of place," Bronin explains. "I went to architecture school in the hopes of influencing that. But quickly, I found out that architects are often constrained by things beyond their control – things like building codes, and zoning codes and historic preservation laws that put in writing limitations on the things that architects can actually do. I decided to do a little bit of graduate work, and then law school because I thought that, in addition to understanding the design side through architecture school, and eventually licensure, it would be really important to understand the legal side. That has as much, if not more impact on what actually gets built.

I see both law and architecture as being intricately related, and one influencing the other in a serious way. And so I think, you know, my interest really stems from trying to understand how we get the outcomes we get in our communities."

Part wiki, part genome-mapping, and part placemaking field guide, the discovery Bronin and her teammates at National Zoning Atlas made relatively early on – during a pilot initiative in the state of Connecticut – led to subsequent breakthroughs, including a way to train and validate a virtually open-sourced, locality-by-locality roll-up of the entire nation's 30,000 jurisdictions was this:

Connecticut only had about 180 jurisdictions," Bronin says. "So to address questions about scaling, I think it's important to note that as you look across these 180 different zoning codes, they have a very similar structure and similar characteristics in terms of how at a very basic level, they regulate land uses, and again, particularly housing. So even though you know Connecticut's a small state and geographic area, it doesn't have as many jurisdictions as let's say, Ohio, which has about 2200. You read a zoning code the same way, whether it's a small town or big city, or you know, again, even a rural unincorporated area that might be governed by county zoning. So we are seeing the ability to scale even though we have community have different sizes that are encompassed in that 30,000 number.

The question might still stand. How could a National Zoning Atlas – one day, anyway – impact the fact that the nation's largest homebuilder by volume is projecting double-digit land price inflation in the next 12 months?

Our results show correlation and not causation," says Bronin. "I think they represent a good example of how the Zoning Atlas projects can be deployed to help us better understand the links between affordability, zoning, and demographic outcomes across a much wider range of communities in the United States."

Click here to hear the podcast.