Why Is It So Hard to Renovate?

Simple home renovations now cost five figures in big cities

Recently, while visiting Washington, D.C., I caught up with some old friends. Our conversation eventually turned to their new home and how unexpectedly painful the renovation process has been. One particularly frustrating example was their bathroom remodel. They didn’t move any plumbing or alter the layout, just a straightforward interior update — just updated the space with modern finishes — yet the total cost of their self-described “small” bathroom soared well into five figures.

What struck me most wasn’t just the price, but the permitting process required to renovate their own home. In D.C., the system is so byzantine that one of the people explaining it to me—a regulatory lawyer—couldn’t get clear answers on how to proceed. The rules themselves were so unclear that when he contacted the local permitting office for guidance, he received different, and sometimes conflicting, answers depending on whom he spoke with. After digging further, I found that this is hardly unique to Washington. Similar stories are common across many large cities, where home renovations have become increasingly expensive and time-consuming.

Reporting by Honolulu Civil Beat documents that prolonged permitting delays for home renovations can add tens of thousands of dollars to project costs, with one homeowner seeing the price of a permitted accessory dwelling unit rise by $40,000 over three years due solely to waiting for approval. In D.C., similar (though not as extreme) issues can arise. A major driver of these costs is regulation: local permits, licensing requirements, inspections, and lengthy approval processes all add layers of delay and expense. These hurdles, often far more onerous than those in neighboring states or less-regulated areas, can dramatically inflate both renovation budgets and timelines.

For perspective, the Washington, D.C. metro area now ranks among the priciest for remodeling; a full gut renovation there can run $400–$800 per square foot, a level of cost virtually unheard of in regions with more streamlined rules. Below, we examine how specific regulatory requirements in cities like New York and D.C. are driving up costs, and contrast them with places that have fewer barriers.

Slow Permits and Pricey Shortcuts

Anyone who has tried to renovate in D.C. is familiar with the reputation of the city’s permitting office (formerly DCRA, now split into the Department of Buildings and other agencies) for being slow and complex. In fact, D.C. officials tacitly acknowledge the sluggish process – they introduced a special fast-track program called “Velocity” that allows applicants to pay a huge premium to expedite reviews. The Velocity program charges an extra fee based on project size, starting at $50,000 for full fast-track service (and about $12,500 for a somewhat slower “expedition” service). In return for that hefty sum, a project’s plans can be reviewed and approved in as little as one day. Only deep-pocketed homeowners or developers can afford this, of course. But it highlights how the normal permit route is so time-consuming that a $50k fee can buy a significant shortcut. According to a permit expediting firm, without using Velocity, most large D.C. construction projects face a minimum of two months just to get paperwork processed and approved. Two-plus months of delay on the front end means additional carrying costs – and if construction is already financed, it means more interest accruing and possibly crews waiting idle. This essentially means the wealthy get a Disney FastPass around red tape; everyone else is stuck in the forever-queue.

For the average homeowner, such delays directly increase the cost of a renovation. In D.C, skilled labor is expensive to begin with, and regulatory hurdles have started dampening homeowners’ willingness to renovate. Data shows that in D.C. proper, permits for major home renovations have fallen roughly 15% since 2022, a decline attributed to “high labor costs and regulatory hurdles.” In contrast, some of D.C.’s suburban neighbors (where permitting can be somewhat more straightforward) saw renovation activity hold steadier or even rise. For instance, Montgomery County, Maryland actually saw kitchen/bath remodeling permits increase 8% in the last year. This suggests that D.C.’s red tape may be discouraging projects that proceed more readily in the suburbs.

All of this contributes to Washington, D.C. homeowners spending a lot more on renovations than they might in a less regulated environment. The cost structure is compounded by other local rules – many D.C. homes are in historic districts, requiring extra approvals for exterior changes, and the city has stringent building codes. It’s therefore not surprising that D.C.-area remodels are so costly. (As noted earlier, a comprehensive home overhaul can easily reach the high six figures in D.C. on a 1,000–2,500 sq. ft. property.) The bottom line is that lengthy permit times and specialized requirements have become part of the price tag for improving a home in the nation’s capital.

A Case of $500 Stove Hookups

New York City provides an example of regulation inflating renovation costs. In late 2025, the NYC Council approved a new rule (Intro 429) that would require all new gas appliances to be installed by a licensed master plumber or a journeyman under a master’s supervision. This means homeowners and landlords will no longer be allowed to simply hook up a gas stove themselves or hire an appliance installer; instead, they must pay for a master plumber’s services. There are only about 1,100 licensed master plumbers in the entire city, and each stove hookup job is expected to cost roughly $500 in labor. This is for a task that many consider routine – connecting a gas range to an existing gas line – which typically takes 15 minutes with basic tools. Previously, appliance delivery companies often offered installation for little or no extra charge, and experienced DIYers could do it on their own. Now, if the mayor signs this law, every NYC resident who buys a new gas stove will be forced to pay hundreds of dollars and potentially endure a wait for an available plumber appointment just to start cooking.

Gas stoves are generally safe to install with simple precautions, and incidents from improper hookups are extremely rare (gas appliances caused only 14 fires in NYC in all of 2023) The 2015 gas explosion cited by proponents of the law was actually caused by illegal gas line tampering, not a DIY appliance connection. In other words, the new rule addresses a problem that isn’t prevalent – what it will definitely do is create a steady stream of $500 jobs for a select group of licensed plumbers. As Josh Barro observed, “regulations like Intro 429 are a big reason why the costs of living in New York City are so high.” When a 15-minute task is turned into a specialty service, consumers pay the price. This stove hookup mandate is just one example of how NYC’s layered regulations – from strict building codes to permit fees and license requirements – nickel-and-dime homeowners and drive up renovation expenses.

Lower Regulation, Lower Costs: A Stark Contrast

When you look at areas with fewer permit hurdles and lighter licensing requirements, the difference in renovation and construction costs is striking. Many red states and cities (which tend to favor deregulation) allow a more streamlined process, resulting in faster timelines and often cheaper labor. A prime example is Texas. Unlike New York or California, Texas does not require general contractors to hold a state license to operate. A city like Dallas does have a local registration for contractors, but it’s a simple process with minimal requirements. This stands in contrast to California, where becoming a general contractor demands at least four years of apprenticeship experience and passing a rigorous 3.5-hour state licensing exam covering everything from business law to building codes. Such stiff requirements in California have contributed to a shortage of qualified contractors (one study found the Sacramento area was about 7,000 construction workers short of what it needed). Fewer contractors and more red tape naturally drive prices up.

Labor costs in Dallas are also noticeably lower, partly because the abundant supply of contractors means competition and reasonable pricing. In practical terms, a homeowner in Texas can often get renovation work done faster and at less cost simply because the regulatory overhead is lighter – fewer mandated permits for minor jobs, ability to hire a competent contractor without months of licensing delays, and less fear of legal entanglements as long as basic building codes are met.

Home renovations exemplify the adage “time is money,” and in heavily regulated cities, both time and money costs are on the rise. Special permitting rules, strict licensing mandates for trades, and multi-layered approval processes in cities like New York, Washington, D.C., San Francisco, and Los Angeles have created an environment where renovating a home is markedly more difficult and costly. These “hidden” costs of regulation pile on top of already expensive labor and materials in major cities, pushing renovation budgets into the stratosphere.

There is a growing call for reform: cities like San Francisco have begun to recognize the problem and are pursuing permit streamlining initiatives to cut red tape. If successful, such reforms could gradually trim the unnecessary costs and delays that have plagued renovations. Until then, however, homeowners in these cities will continue to pay a premium for their projects that is largely driven by local government rules.