Study: Zoning Drives Up Home Costs And Reduces Stock Of Affordable Housing

By Peter Fabris, Contributing Editor | June 16, 2017

Communities with strict zoning regulations tend to have higher-priced homes and a significantly lower stock of affordable houses, according to a new analysis of 189 metro areas by Federal Reserve economist Raven Molloy. The study found that in the top third of most-regulated areas, 27% of owner-occupied homes are affordable to low- to moderate-income buyers. In sharp contrast, in the lowest third of least-regulated areas, 67% are affordable for that group.

Regions with the most regulations and fewest starter homes include coastal cities like Baltimore and Seattle. Other areas also fell into that category including Denver, Fresno, Calif., and Phoenix. Areas in the South and Midwest including Fort Wayne, Ind.; Myrtle Beach, S.C.; and Des Moines, Iowa have the fewest regulations and the most affordable housing.

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