The Misperceptions Restricting the Housing Supply

How local attitudes toward zoning reform hinder efforts to boost housing production.

Read Time: 2 minutes

December 1, 2022, 9:00 AM PST

By Diana Ionescu @aworkoffiction

Multistory wood frame apartment building under construction against blue sky

Sundry Photography / Apartment construction

In a piece in City Journal, Christopher S. Elmendorf, Clayton Nall, and Stan Oklobdzija describe the results of a survey that assessed the factors Americans blame for high housing costs, noting that many respondents expressed skepticism that upzoning initiatives would lower housing costs. Unlike other consumer goods, in the minds of many Americans, housing does not respond to the normal pressures or supply and demand. This makes zoning reform that is more permissive to higher density housing and new construction an uphill battle in many communities.

“Asked to think about their city’s future, the vast majority of respondents across two surveys—Republicans and Democrats, homeowners and renters—say that they wish home prices and rents were lower. But they don’t generally subscribe to the other half of the elite consensus: namely, that restrictive zoning is to blame for high prices.” In other words, “We find that most people simply don’t believe that increasing housing supply would lower prices.” According to the authors, “Across all the survey variations, only a minority of respondents predicted that a large, positive supply shock would exert downward pressure on home prices and rents.”

The authors add, “We asked respondents to designate up to three actors as being ‘responsible for high housing prices and rents in your area.’ Developers and landlords took the brunt of the blame; environmentalists and anti-development activists got off scot free.” Ultimately, “[the] study suggests that states have done little because there’s not yet widespread public support for preemptive state up-zoning.”

Monday, November 28, 2022 in City Journal

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