Nate Berg reports on information compiled in the 8th Annual Demographia International Housing Affordability Survey, and asks to what extent the affordability of housing is tied to land use policies and how much is related to other factors.
While the rankings reported in the survey are interesting -- Detroit and Atlanta most affordable, San Jose and San Francisco/Oakland least affordable -- Berg takes issue with one of the key conclusions that the study's authors make.
Wendell Cox and Hugh Pavletich argue that "where land is rationed (by more restrictive land use regulation), house prices will rise." The authors specifically call out as as causal factors "new construction that is significantly controlled by comprehensive plans or through more restrictive land use regulations "referred to as ‘compact development,' ‘urban consolidation,' ‘growth management' and ‘smart growth.'"
Berg, however, contends that, "though there is certainly a case to be made that restrictive land use policies can limit supply and drive up costs, these aren't the only factors in play."
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