Barn Swallow Consulting

Cost of delay calculator · Worked example: the Denver region

What does waiting add to the price of a home?

Drag the sliders to your market. Everything starts at Denver region figures; change anything you know better.

Added per new home

1 Time in entitlement

months

In your jurisdiction, start to finish for a typical project.

months

What an efficient process needs. Salt Lake City entitles in under 9 months.

Avoidable delay

2 Land and capital

$

Raw land divided by the lots it yields, not the finished-lot price. Know it per acre? Convert in step 4.

% / yr

Change the mix in step 4.

Holding cost per lot

3 Your region

Denver region: $660,000

$

Single-family. Denver region: 17,369

/ yr
4 Fine-tune the holding cost Soft cost, debt mix, tax ·
  • Loan interest
  • Equity return
  • Property tax
  • Overhead

Land

If you know land per acre rather than per lot. Sets the land cost per lot in step 2.

$

Net of streets, open space and detention

lots

Engineering, planning, legal, per lot

$

It accrues over the period, so about half on average

%

Financing

Loan-to-value on the land loan

%

NAHB land acquisition rate, Q2 2025: 9.95%

%
Count the return on equity On: what the deal must earn back, as reported. Off: cash out of pocket only.

What builders underwrite land deals to

%

The blend of the two, set directly in step 2

Holding

Effective yearly rate on land value. Denver region: 2.34% (27.5% assessed × 85 mills). Near zero if still agricultural.

% / yr

Annual rate on capital at risk

%
5 How the market responds

NAHB: $1 of cost adds $1.00 to $1.30 to price

×

Saiz (2010). Denver and Colorado Springs average 1.6.

Adjust for demand response Off: NAHB’s direct method, as reported. On: part of the cost lands in price instead, so fewer homes are lost.

NAHB priced-out estimate for your state. Colorado: 1,699.

How the method works

Two multiplications. Avoidable months times the monthly cost of holding a lot gives the cost to one home. That times the homes started each year gives the cost to buyers across the region.

Only the time beyond an efficient benchmark is charged, because entitlement takes some time in any city. The structure follows the method Robert Dietz used at NAHB to cost the skilled labor shortage.

What moves the answer most: land per lot and avoidable months. Double either and the cost nearly doubles. Cost of capital comes next. Property tax matters least.

Read the results carefully

  • The added cost is largely a transfer to lenders and taxing authorities, not net economic loss.
  • Housing not produced is valued at full sales price, not value added. Publish the components alongside the combined figure.
  • The priced-out count is households crossing a mortgage threshold at a point in time. It is a stock, not a yearly flow.

Where the defaults come from

  • Entitlement times: ten master-planned programs in the Denver region, median of nine jurisdictions.
  • Land: $100,000 per raw acre at 2.5 lots an acre. Cost of capital: 75% debt at 9.95%, 25% equity at 22%.
  • Loan rate: NAHB AD&C Financing Survey. Home price and starts: Census Building Permits Survey, 2024.
  • Supply elasticity: Saiz (2010). Priced-out rate: NAHB 2025 priced-out estimates.