Wednesday, February 6, 2019

Brookings Institute Hamilton Project: Land Use Restrictions Limit Housing Affordability in Booming Local Economies

A new report by the Brookings Institute's Hamilton Project finds that lower- and middle-income Americans are effectively shut out of booming metro areas due to the high cost of housing. The report finds that high housing costs are driven by land-use restrictions that limit housing growth, and thus access to opportunities for higher paying jobs, better access to health care, and educational attainment. The study gives examples of cities that have used mid-level zoning and public investment in housing, such as Montreal and Vienna, where housing is more affordable to average workers. The author, Daniel Shoag of Harvard's Kennedy School and Case Western Reserve University, advocates relaxing excessive land use restrictions, establishing by-right development policies, and investing in transportation. Shoag outlines the negative effects of rent control, which he calls "an ineffective remedy to the fundamental problem, even if they can temporarily shelter those fortunate enough to benefit from the rent control from price increases." Instead, he believes a more effective solution would include wide-scale upzoning, not just in the poorest neighborhoods where neighborhood opposition tends to be the weakest, in conjunction with housing voucher programs that are based on Small Area Fair Market rents. Read more. 

A CityLab summary of the report's findings can be found here.

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