Urban Institute: Can we deregulate ourselves out of the affordable housing crisis?

Urban Institute, July 1, 2019: Can we deregulate ourselves out of the affordable housing crisis?

After decades of the federal government playing a limited role in local land-use regulations, there is renewed interest on both sides of the aisle for a stronger federal effort to reign in restrictive zoning laws.

Last week, President Trump signed an executive order establishing a White House Council on Eliminating Regulatory Barriers to Affordable Housing, which is charged with quantifying the effects of local zoning laws and other regulatory barriers on housing markets and recommending “best practices for removal.” And most of the Democratic presidential candidates who have offered housing solutions in their policy platforms include ideas to ease local land-use restrictions.

The motivation for this renewed interest shouldn’t be surprising: housing costs continue to grow faster than incomes in most metropolitan areas, and no US county has enough affordable housing for its low-income renters. Local zoning laws and other land-use regulations suppress supply and drive up housing costs (PDF), though by how much is hard to quantify because of a lack of reliable and consistent data.

But will deregulatory strategies actually work? State and local governments are increasingly experimenting with zoning and land-use reforms aimed at unleashing housing supply and improving affordability. But many of these reforms are still relatively new, and few have been rigorously studied.

Although oversight of local land-use regulations may bring a contentious debate among researchers and advocates, hope remains for a robust and positive role for the federal government in improving land-use rules and lifting exclusionary barriers, as well as a rich evidence base to draw from along the way. Here are four insights from research that can help guide federal policymaking in this area.

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