How to increase housing affordability: Understanding local deterrents to building multifamily housing

Arbeitspapier

This paper studies how local land-use regulations and community opposition affect the trade-offs to building single-family, multifamily, and affordable housing and how their effects on rents differ from their effects on house prices. Using lot-level zoning regulations and a boundary discontinuity design at regulation boundaries in Greater Boston, we obtain causal estimates for the effects of 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 number of dwelling units)-either alone or in combination with relaxing maximum-height restrictions or allowing multifamily housing-is the most fruitful policy reform for increasing the housing supply and reducing multifamily rents and single-family-house prices. However, adopting multifamily zoning or relaxing height regulations alone has little effect on the number of units built or on rents. Moreover, in each land-use relaxation scenario where rents fall, house prices also fall, complicating the political economy of land-use reform. We also find that mature suburbs that are closer to a city center and have a representative town meeting structure of local governance are the most restrictive with respect to adding multi-unit housing. Furthermore, inclusionary zoning policies such as Massachusetts's Chapter 40B rarely substitute for relaxing zoning regulations, particularly restrictions on building multifamily housing.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Papers ; No. 22-10

Classification and Topics

• Classification: Wirtschaft ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand ; Housing Supply and Markets ; Regional Development Planning and Policy ; Intergovernmental Relations; Federalism; Secession ; Structure, Scope, and Performance of Government
• Subject: multifamily zoning ; height restrictions ; density ; house prices ; rents

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kulka, Amrita ; Sood, Aradhya ; Chiumenti, Nicholas
• Event: Veröffentlichung
• (who): Federal Reserve Bank of Boston
• (where): Boston, MA
• (when): 2022

Further information

• DOI: doi:10.29412/res.wp.2022.10
• Handle: http://hdl.handle.net/10419/273031
• Last update: 10.03.2025, 11:44 AM CET