Dive Brief:
- In addition to restrictive zoning and land-use regulations, CityLab reported that geographic qualities of cities also play a role in housing shortages and rising prices as well, making major metros either expensive or expansive.
- According to BuildZoom economist Issi Romem, the more a city can expand geographically, the more housing it can build, thereby easing pressure on demand and lowering rental and home prices.
- According to Romem's figures, expensive cities must loosen zoning and land-use rules and increase density to accommodate demand. Expansive cities, CityLab reported, need to plan for the day they will exceed currently liberal boundaries.
Dive Insight:
CityLab reported that, according to Romem's numbers, the country's cities and metropolitan areas have trended toward expansion over the last 50 years and have increased in size by approximately 10,000 square miles. However, the expansion has not been equally distributed across all cities and did not occur at the same time. Romem said the cities we would consider expensive, like San Francisco, saw the greatest growth from 1950 through the 1970s. On the other hand, expansive cities, like Atlanta, experienced the lion's share of growth from 1990 through the 2000s.
According to the Wall Street Journal, Romem said that the best of all scenarios is that cities relax regulations and build to a higher density, but, politically, he said, "empty fields" are the quicker, more feasible option.
A Zillow report earlier this month found that housing and land-use regulations were a determining factor in whether a city could meet its residents’ needs for housing, as far as both inventory and cost. Zillow said regulation is not the only influence but it's a major one. Zillow also found that municipalities with the strictest land-use policies had rents triple those in areas with looser regulations and saw a bigger decrease in available rentals. Restrictive building regulations also lead to less construction, Zillow said, resulting in fewer for-sale properties, which increases home prices.