>>Over the past three decades, local barriers to housing development have intensified, particularly
in the high-growth metropolitan areas increasingly fueling the national economy. The
accumulation of such barriers – including zoning, other land use regulations, and lengthy
development approval processes – has reduced the ability of many housing markets to respond to
growing demand. The growing severity of undersupplied housing markets is jeopardizing
housing affordability for working families, increasing income inequality by reducing less-skilled
workers’ access to high-wage labor markets, and stifling GDP growth by driving labor migration
away from the most productive regions.
Other relevant excerpts:
>>Researchers examining proxy measures – including the
prevalence of zoning and land use cases in state courts, which correlate strongly with static
indices of housing barriers and supply constraint surveys – have found that barriers to housing
development increased rapidly from 1970 to 1990, and continue to increase through the present
day.
2
...
>>Though popular coverage of these challenges has been most focused on the Bay Area, Seattle, and major
East Coast cities, Los Angeles provides a clear illustration of the impact of the primary barrier to
development – restrictive zoning. In 1960, Los Angeles was zoned to accommodate 10 million
people; after decades of population growth and increased demand, the city is today zoned for
only 4.3 million people.9
...
>>In just the last 10 years, the
number of very low-income renters paying more than half their income for rent has increased by
almost 2.5 million households, to 7.7 million nationwide, in part because barriers to housing
development are limiting housing supply.11
Since 1960, the share of renters paying more than 30
percent of their income for rent has more than doubled from 24 percent to 49 percent.12 And over
that time, real household income increased by 18 percent, but inflation adjusted rents rose by 64
percent.
...
>>A recent
study noted that in theoretical models of mobility, economic research suggests our Gross
Domestic Product would have been more than 10 percent higher in 2009 if workers and capital
had freely moved so that the relative wage distribution remained at its 1964 level.
21 Most of this
loss in wages and productivity is caused by increased constraints to housing supply in high-
productivity regions, including zoning regulations and other local rules.
So to summarize, economists have observed an increase in zoning/land-use restrictions since about 1970. They attribute the rise in the proportion of income consumed by rent to these restrictions on housing supply growth.
They conclude that absent zoning and other restrictions on housing supply expansion, the US would have less income inequality and a significantly higher GDP.
Thanks. But as I suggested above, the same is happening in other countries, including mine, without these restrictions. And just as here, the report speaks of various tax and cash incentives etc, basically profit guarantees, needed to get private companies to build affordable housing. So to suggest that zoning restrictions are the core issue doesn't seem to hold water, even though I won't deny that it may increase the problem in the US.
Not sure how you can use such assured language when the very next line in your last cherry-pick about the GDP is this:
> This estimate is tentative, and would imply that some cities would see counterfactual employment increases of a significant magnitude resulting from reduced housing restrictions
Sigh, so you googled up an interview with a representative from Fastighetsägarna (literally translated "The property owners") and conclude with confidence that government restrictions is the reason. These were in place during the time of my anecdote as well.
