New study: High cost of housing directly related to restrictive zoning
Affordable housing is a hot topic these days where I live, and I
bet where you are as well. I live in a rural area, and it is such
But when it comes to housing policy and concerns about making sure those with low incomes have access to homes, the issue gets complicated. The most common response by policymakers is mandated affordable housing quotas or housing subsidies.
But a new report from the New York Federal Reserve by an economist from Harvard and one from Pennsylvania's Wharton School points a different direction.
In "The Impact of Building Restrictions on Housing Affordability," the authors argue that in the most of the country housing prices are very close to construction costs. Where prices are high relative to construction costs, economic analysis shows that the major culprit is restrictive zoning. They also point out that many popular policies, like "smart growth" policies to increase density, affordable housing mandates, and subsidies, don't do much to help. Attacking zoning and other regulations on housing is the best way to make homes more affordable.
You can get the study, The Impact of Building Restrictions on Housing Affordability, at http://www.ny.frb.org/rmaghome/econ_pol/2002/702glae.pdf.
In Reason's study Repairing the Ladder: Toward a New Housing Policy Paradigm, Harvard's Howard Husock lays out a new approach to affordable housing policy-- http://www.rppi.org/ps207.pdf
Dr. Adrian Moore
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