THE RESEARCH
Experts agree that overly restrictive land use regulation exacerbates housing unaffordability. The Colorado Housing Affordability Project (CHAP) has compiled research on this topic from a variety of perspectives. This research consistently shows that:
- High housing costs distort labor markets and slow economic growth.
- Smart land use regulations can increase housing supply—and affordability.
- Lack of housing development hurts the environment.
- Limiting housing construction raises public infrastructure costs.
Research shows that a lack of affordable housing slows economic growth, changes the makeup of our neighborhoods, and hurts the environment. Building housing in the right places benefits our economy, our communities, and our families.
High housing costs distort labor markets and slow economic growth.
Research supports the conclusion that restrictive land use controls make housing more expensive by raising the price of housing far above the cost of construction. The Federal Reserve Bank of Boston observed in 2010 that unaffordable housing can reduce employment growth by one to two percent each year. This effect is consistent across U.S. cities and states.
Limiting the growth of successful cities generally forces Americans to live in less economically productive places. This trend reduces economic growth and welfare not only in these high-productivity cities—which include Colorado’s Front Range—but also nationally. It is estimated that U.S. GDP would be nearly nine percent higher if housing supply was more plentiful in just three high-productivity markets: New York, San Francisco, and San Jose.
Smart regulations increase supply—and affordability.
Comprehensive urban planning facilitates affordable housing by adding transparency and reducing development costs. The impacts of zoning regulations in reducing housing supply outweigh any negative impacts of new development on community housing affordability. Contrary to popular belief, new construction is shown to increase affordability in neighborhoods for renters by five to seven percent relative to locations further away from the new development. Additionally, new development slows rent increases—rather than causing or accelerating them—and boosts in-migration from low-income areas. Increasing the overall supply of housing—market rate or affordable—reduces displacement.
Distorted development hurts the environment.
High-cost housing in cities pushes urban development into areas vulnerable to the immediate impacts of climate change, including areas subject to wildfire risk in Colorado. When urban areas restrict residential development, “substitute building” in outlying areas has a negative environmental impact.
Sprawling residential development patterns directly contribute to greenhouse gas emissions and reduced open space. Encouraging density through infill development in single-family districts can help alleviate this burden. Unaffordable housing has significant long-term impacts on other aspects of well-being, including health, particularly for those who have historically been denied housing choice. Over the long term, these health outcomes are costly.
Low density regulations raise public infrastructure costs.
Zoning laws that only allow low-density single-family development drive up infrastructure costs, which contribute to high housing costs. Single-family districts have the capacity to allow for more efficient and less costly additional density, such as accessory dwelling units, if land use regulations would allow. This additional housing spreads the cost of infrastructure across a greater number of housing units, reducing housing costs. In particularly land-constrained markets, rezonings paired with affordability requirements can successfully encourage the development of efficient affordable housing and mixed-income communities that utilize existing public infrastructure.
CHAP Issue Briefs
The CHAP research team has authored a series of issue briefs discussing specific topics relevant to zoning reform and housing affordability.
These briefs include:
CHAP Issue Brief No. 1: Land Use Restrictions’ Impacts on Economic Growth.
Land use restrictions can have significant impacts on economic growth for our cities and regions. This issue brief discusses how zoning, if implemented incorrectly, can stifle job creation and economic opportunity.
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CHAP Issue Brief No. 2: Regulatory Strategies for Accessory Dwelling Units.
Accessory dwelling units are one means of adding housing supply while limiting the impacts of that additional housing supply. This issue brief looks at strategies for allowing accessory dwelling units in our communities.
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CHAP Issue Brief No. 3: Land Use Restrictions’ Impacts on Environmental Sustainability.
Restrictive zoning isn’t only bad for housing affordability—it’s bad for the environment, too. This issue brief looks at restrictive zoning laws’ impact on environmental sustainability goals.
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CHAP Issue Brief No. 4: Legal Challenges to Land Use Reform.
Zoning reform isn’t easy, and is sometimes made the subject of legal challenges. This issue brief reviews how zoning reform to create more affordable housing supply would fare in a legal challenge in Colorado.
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CHAP Issue Brief No. 5: Innovative Local Responses to the Housing Affordability Crisis.
Although CHAP’s platform seeks statewide zoning reform, local governments have opportunities to create more affordable housing, too. This issue brief considers strategies that have been employed by local governments around the nation to increase the supply of affordable housing.
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CHAP Issue Brief No. 6: State Legislative Reforms for Housing Affordability.
Several states have taken steps to create more supply of affordable forms of housing. This issue brief addresses the legislation that has been adopted in these states, and how it might apply here in Colorado.
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CHAP Research Report: State of Colorado Housing Research.
This report looks at the current state of housing in Colorado, with particular focus on cost burdens and affordable housing needs. Key takeaways include: (1) we’ve underbuilt housing as our population has grown; (2) middle-income households have experienced the greatest increase in cost burden; and (3) we need missing middle housing to help us solve our current challenges.
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CHAP Research Memorandum: Colorado Authority to Regulate Land Use as a Matter of Statewide Concern in Home Rule Jurisdictions.
This memorandum addresses Colorado’s authority to regulate land use as a matter of mixed statewide and local concern in home rule jurisdictions to address the state’s challenges relating to housing affordability, greenhouse gas emissions, transportation, water, and climate.
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LISTEN TO LEARN (AKA PODCASTS)
- The Zoning Whisperer. Eve Picker and Eric Kronberg. 2018.
- Emily Hamilton on Land-Use Regulation and the Cost of Housing. 2016.
- Housing Recovery with Emily Hamilton. 2020.
- Jenny Schuetz on Land Regulation and the Housing Market. 2020.
- Examining The Relationship Between Land-Use Regulation And Affordable Housing. 2016.
- Yes in My Backyard. 2019.
- Land Use Regulations, the Rise of NIMBYism, and Options for Reform. 2019.
More Resources—and Direct Links to the Research Summarized Above
Planning an Affordable City
Roderick M. Hills, Jr. & David Schleicher, Planning an Affordable City, 101 IA L. Rev. 91 (2015)
This article argues that binding and comprehensive urban planning—unpopular in recent decades—can be a powerful tool to promote affordable housing. Specifically, the authors discuss how it can avoid political challenges to creating affordable housing and reduce information costs borne by developers, in turn broadening the market for new construction.
Housing Policy in California
California Will Keep Burning. But Housing Policy Is Making It Worse.
This October, 2020 article discusses the need to change current practices of building in California’s wildland urban interface, which is increasingly affected by wildfires. New housing construction has been pushed to sprawl in the wildland urban interface due, in large part, to affluent communities’ success in keeping it out of their neighborhoods. The author discusses various ways in which California can discourage construction in the wildlife urban interface while also addressing its affordable housing crisis.
Increasing the Density of America’s Cities
This article discusses the paradox of liberal, progressive communities seeking to preserve single-family zoning. The author argues that these communities can show their commitment to reducing greenhouse gas emissions, promoting social equity, and preserving open space by embracing denser zoning. The article also discusses various initiatives in places including California, Minneapolis, and Oregon.
Inclusionary Upzoning
Inclusionary Upzoning: Tying Growth to Affordability
Explores inclusionary zoning paired with upzoning.
Relationship Between Zoning and Affordability
The National Housing Conference provides an overview of the relationship between zoning regulations and housing affordability.
The Economic Implications of Housing Supply
Edward Glaeser and Joseph Gyourko, The Economic Implications of Housing Supply
This article reviews the basic economics of housing supply, focusing on whether market prices roughly equal the costs of housing production. It then discusses how housing supply restrictions affect patterns of household wealth and the incentives for relocation to high-wage, high-productivity areas. The authors found that housing restrictions have benefitted older, richer buyers in America’s most regulated areas at the expense of those who are pushed elsewhere. In sum, the authors contend that the costs of construction restrictions are not justifiable.
Local Effects of New Housing in Low-Income Areas
Supply Shock Versus Demand Shock: The Local Effects of New Housing in Low-Income Areas
Abstract: We study the local effects of new market-rate housing in low-income areas using microdata on large apartment buildings, rents, and migration. New buildings decrease nearby rents by 5 to 7 percent relative to locations slightly farther away or developed later, and they increase in-migration from low-income areas. Results are driven by a large supply effect—we show that new buildings absorb many high income households—that overwhelms any offsetting endogenous amenity effect. The latter may be small because most new buildings go into already-changing areas. Contrary to common concerns, new buildings slow local rent increases rather than initiate or accelerate them.
Factoring Equity into Upzone Decisions
How Should Seattle Factor Equity Into Upzone Decision?
Written when Seattle was contemplating how to upzone neighborhoods, this article explores the arguments in favor of and against different strategies. It also discusses a data-driven analysis of a partial implementation of a mandatory housing affordability, which found that areas of Seattle that grew most retained the most low-income households.
OUR PLATFORM
Tackling all of the problems that contribute to Colorado’s high housing costs is a big task. CHAP’s initial area of focus is: removing zoning barriers to the development of affordable forms of housing.
THE ISSUES
Colorado’s economy continues to grow, yet housing construction has not kept up. This hurts all of us, particularly lower- to middle-income workers.