Smart Growth Impacts Housing Affordability

A new study released by Reason Public Policy Institute finds that statewide growth management laws in Florida and Washington are costing homebuyers thousands of dollars. The report shows that between 1995 and 2000, Washington’s Growth Management Act added $5,064 ($844 annually) to the price of a typical home in the state. Thus, over the life of a standard 30-year mortgage with a 7 percent interest rate, the growth management law will add more than $12,000 to the cost of a home in Washington. Smart Growth and Housing Affordability: Evidence from Statewide Planning Laws demonstrates that Washington’s Growth Management Act was accountable for 26 percent of the increase in the state’s housing prices between 1995 and 2000. And the study reveals strikingly similar results in Florida. Between 1994 and 2000, growth management laws added $5,425 ($775 annually) to the price of a home in Florida and were responsible for 20 percent of the increase in the state’s housing prices.

Thanks to Reason Alert