Land-Use Regulations and its Impact on Affordability

A new study from Harvard University's Joint Center for Housing Studies analyzes the efforts over the past five decades to remove barriers to homeownership, and certain zoning regulations have harmed affordability. 

The author, Michael Stegman of Harvard University, said there have been at least five efforts to alleviate or lift housing barriers. 

“Each is based on the proposition that unnecessary land use regulations drive up production costs and drive down housing supply, especially for starter homes and affordable apartments,” Stegman said. “Generally, regulatory barriers include such things as ‘land use restrictions that make developable land much more costly than it is inherently, zoning restrictions, off-street parking requirements, arbitrary or antiquated preservation regulations, residential conversion restrictions, and unnecessarily slow permitting processes.’” 

The most recent attempt to cure affordability issues is President Donald Trump’s White House Council on Eliminating Regulatory Barriers to Affordable Housing, which is chaired by Ben Carson, Secretary of the U.S. Department of Housing and Urban Development. The council was created by an executive order in June 2019.

Stegman wrote that the council has a year to “identify practices and strategies that most successfully reduce and remove burdensome Federal. State, local, and tribal laws, regulations, and administrative practices that artificially raise the costs of housing developments, while highling actors that successfully implement such practices and strategies:” 

According to the report, the number of state-level regulatory barriers increased by nearly half between 1980 and 2010. Also, HUD estimates that the effects of 40 years of housing regulations have added anywhere from $850 million to $2 billion in additional yearly costs to the Housing Choice Voucher Program. 

“In my judgment, the ineffectiveness of these previous federal initiatives is in large part due to underestimating the national implications of not addressing the problem, and to policymakers’ collective judgment that the political pain associated with these initiatives considerably exceeds the benefits that might flow from the modest policy agendas that have resulted from them,” Stegman said. 

What lies ahead? Stegman said there is a “ideological and political consensus” emerging that exclusionary zoning and related development barriers decrease housing affordability by halting supply and increasing prices. 

The cities of Chicago, Seattle, Sacramento, and Tacoma, as well as the state of Massachusetts, have begun removing restrictions, thus fostering more affordable housing opportunities, and implementing transit-oriented zoning ordinances, and speeding up permitting and construction processes. 

However, markets in Oregon and Minnesota have passed measures prohibiting single-family zoning in an effort to build affordable housing through duplexes, triplexes, or housing clusters.