Study: Housing Crisis Stems from Inequality (Not Zoning)

A new paper examines the impacts of broad economic trends—like inequality, job markets, and migration—on housing markets in the nation's major metropolitan areas.

2 minute read

March 25, 2019, 9:00 AM PDT

By Elana Eden


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New research suggests that income distribution—not population growth or land—is "the real factor driving growth in housing prices" in cities.

UCLA and London School of Economics Professor Michael Storper, a leading expert in urban and regional economics, is an author of the new study that brings national economic factors—like inequality, job markets, and migration—to bear on housing affordability. In an interview with The Planning Report, he unpacks the policy implications of his new research.

One finding of note: "Our analysis shows that blanket upzoning is likely to miss its affordability target," Storper tells TPR. "It will favor those who can pay the price of housing in high-demand areas … What it's not going to do is solve the housing crisis for the middle classes and lower-income people."

Because housing markets are so tied to the presence of high-paying jobs and high earners, simply upzoning "allows for market speculation to dominate," he says. "The market will naturally respond best in areas with the greatest returns on upzoning—mostly places with dense, white-collar employment where high-income people will want to live to be closer to their jobs." That, in turn, will lead to the displacement of lower-income populations in upzoned neighborhoods.

Rather than treating upzoning as a "lever" to move prices, researchers recommend that cities adopt specific policy interventions directly targeting affordability. Storper also suggests that U.S. cities look to other countries for a more successful model of public housing, noting, "When the public sector controls land, it has the ability to weigh in on the future of the city."

Read the full interview in The Planning Report.

Friday, March 15, 2019 in The Planning Report

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