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

Kulka. Amrita, Aradhya Sood and Nicholas Chiumenti
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Kulka. Amrita: University of Warwick
Aradhya Sood: University of Toronto
Nicholas Chiumenti: FRB Boston

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

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.

Keywords: multifamily zoning; height restrictions; density; house prices; rents JEL Classification: R21; R31; R58; H77; H11; K25 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (3)

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https://warwick.ac.uk/fac/soc/economics/research/c ... tions/wp635.2022.pdf

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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:635

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