Study: Urban Institute analysis underestimates zoning reform impacts

A recent Urban Institute study fails to accurately assess the impact of recent zoning reforms, argues Tobias Peter in a piece for American Enterprise Institute.

Although the Urban Institute's study claims that zoning reform has only increased housing supply by cumulatively 0.8% over a three- to eight-year period, an analysis by AEI shows that "Meaningful zoning reforms can increase housing supply by 1 to 2.5 percent per year."

According to Peter, of the 180 zoning changes underlying the UI dataset, 178 do not qualify as major reforms. "They are misclassified, too minor to plausibly affect housing supply, or do not contain enough information to evaluate the policy change."

Peter adds,

If the underlying classifications are incorrect, the estimated effect cannot be interpreted as the impact of zoning reform. When the dataset mixes fundamentally different policy changes and the methodology cannot properly distinguish between them, the estimated average effect will inevitably be biased and misleading.

For Peter, the issue is about measurement. While prioritizing scale, UI's study sacrifices accuracy, giving zoning reform opponents a weapon against change by minimizing the impacts of reforms.