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How to Increase Housing A ordability? Understanding Local Deterrents to Building Multifamily Housing

Author

Listed:
  • Kulka. Amrita

    (University of Warwick)

  • Sood, Aradhya

    (University of Toronto)

  • Chiumenti, Nicholas

    (FRB Boston)

Abstract
This paper studies how various land-use regulations interact to affect housing supply and affordability. We use cross-sectional variation across space from a novel parcel-level zoning data and a boundary discontinuity design at regulation boundaries to obtain causal estimates for the effect of various zoning regulations on the supply of different types of housing, single-family house prices, multifamily rents, and households’ willingness-to-pay for higher density. We find that relaxing density restrictions (minimum lot size and maximum dwelling units), either alone or jointly with relaxing other regulations, is most effective at increasing supply, particularly of multifamily properties, and reducing rents and house prices. Conversely, enabling multifamily zoning or relaxing height regulations alone has little impact. Our results suggest that the small-scale reforms in zoning regulations proposed around the country can increase housing affordability. However, a fall in multifamily rents is often accompanied by a reduction in single-family house prices, complicating the political economy of land-use reform.

Suggested Citation

  • Kulka. Amrita & Sood, Aradhya & Chiumenti, Nicholas, 2022. "How to Increase Housing A ordability? Understanding Local Deterrents to Building Multifamily Housing," CAGE Online Working Paper Series 635, Competitive Advantage in the Global Economy (CAGE).
    • Handle: RePEc:cge:wacage:635
    as

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    File URL: https://warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/wp635.2022.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    multifamily zoning ; height restrictions ; density ; house prices ; rents JEL Classification: R21 ; R31 ; R58 ; H77 ; H11 ; K25;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • K25 - Law and Economics - - Regulation and Business Law - - - Real Estate Law

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