Mastering the metropolis through research and thought leadership.
Working Papers

The Impact of Zoning on Housing Affordability

Working paper #395
Edward L. Glaeser and Joseph Gyourko

This paper examines whether there is a housing affordability problem in America by comparing house prices to the costs of new construction. It then proceeds to investigate why prices far exceed construction costs in certain areas. In most of the country, home prices appear to be fairly close to the physical costs of construction. Only in particular areas, especially New York City and California, do housing prices diverge substantially from the costs of new construction. The bulk of the evidence examined indicates that zoning and other land use controls are responsible for prices in high cost areas of the country. This indicates that restrictions on supply and new development, not just high demand for certain regions, are responsible for the housing affordability problems that do exist. The results also suggest that if housing affordability advocates are interested in reducing housing costs, they would do well to start with zoning reform, and not focus as much on public or subsidized construction programs.

Download full paper · 1MB PDF

In This Section
Explore Topics

1010 Affordable Housing Amazon Amenitization Architecture Artificial Intelligence Asia Australia automation Autonomous Vehicles Borrowing Constraints Brexit California Canada Capital Business China Co-Working Environment coastal markets Colombia Commercial Brokerage Commercial Real Estate commissions Congestion consumer bias covid-19 CRE credit card market Credit Default Swaps Credit Insurance Credit Risk Transfers Culture Data Analytics Data Collection Technology Debt Market Demand Demographics Density Development Discrete Choice disruption Diversity drones e-Commerce Economic Corridors economic policy economics Equity Funds Equity Market Ethnic Factors Europe Fannie Mae financial asset management Foreclosures Foreign Policy France Freddie Mac general equilibrium Global Global Financial Crisis Globalization great depression Great Recession Hedonic Housing & Residential housing boom Housing Disease housing prices Housing Supply Identity Income Inequality India Inter-generational mobility Investing jobs labor market Lagging Regions land use regulation Language Macroeconomics malls Market Pricing megacities Microeconomics Migration Minimum Payments Mixed-Use Mobility moral hazard mortgage insurance mortgage market Mortgage Rates Mortgages Multi-family Nation Building Non-Traditional Mortgages Office Market office sector Placed Based Policies Political Risk Price Discovery Private Equity Business public health Public Schools real estate brokerage Real Estate Investment Real Estate Investment Trusts Recession Rental Retail Retirement reverse mortgages Risk Adjustment risk-shifting robotics single family housing Slums Sorting South America Spatial Regions spillover effect Sub-Prime Mortgages Sustainability Technology trade transportation United States Urban Urbanization Warehouse welfare