Measuring the Effect of Zoning on Housing Prices

As noted in an article by Jenny Schuetz, both the Trump administration and a subset of the Democratic presidential candidates have proposed the removal of regulatory barriers to new development in the hopes of alleviating the nation's ongoing housing affordability crisis.

"But to design policies that are effective are reducing these barriers, we need to answer several questions," writes Schuetz. "How exactly does zoning drive up housing costs? How can we tell whether zoning is excessively restrictive?"

The answers to those questions and several that follow are "practically hard" to determine, according to Schuetz. "There isn’t one central database that contains all the thousands of local zoning codes, so most researchers conduct surveys of local planning officials. A few scholars have reviewed and manually coded laws, and there is increasing interest in using technical tools such as text analysis and machine learning….Each method has distinct strengths and limitations."

Schuetz provides examples of some of the research that have deployed those methodologies, before documenting another complication and suggesting a new frame for informing zoning reform in the name of housing affordability.