| Regulations
and Housing Development: What We Know
Michael H. Schill
University of California, Los Angeles
Informed public debate on the issue of regulatory barriers to
housing development is impeded both by the lack of precision
concerning the concept of regulatory barriers and the absence
of sophisticated research on the impact of regulations on the
supply and cost of housing. Existing research suggests that
a wide range of federal, state, and local regulations, including
building codes, environmental laws, land use regulations, and
impact fees, as well as the government procedures to administer
these regulations, reduces the supply of housing and generates
substantial costs.
Nevertheless, not all of these regulations can be fairly
condemned as “barriers.” To
the contrary, some costly regulations can be justified because
they promote public
health or safety. Others increase price because they generate
amenities and, thereby,
increase the demand for housing. Many forms of federal, state,
and local regulation,
however, are neither necessary nor efficient. Others may be
efficient, but still generate
unacceptable affordability problems for low- and moderate-income
households.
Existing research on the effects of government regulation
on the supply and cost of
housing is insufficient to guide public policy. Current studies
either ignore entire
categories of relevant rules or employ poorly designed methodologies
that cannot
separate the independent effects of demand and supply. Along
with political constraints,
this lack of research has contributed to insufficient efforts
at all levels of
government to remove regulatory barriers.
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