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Harvard’s Joint Center Argues Land Use Regulations Are a Civil Rights Issue

Published by Peter Lawrence on Wednesday, October 2, 2019 - 12:00AM

Harvard’s Joint Center for Housing Studies recently released a working paper that argues that a national response to exclusionary land zoning practices is needed to effectively resolve not only the affordable housing crisis, but to improve the declining rates of economic mobility and productivity as well. The paper "Eliminating Exclusionary Land Use Regulations Should Be the Civil Rights Issue of Our Time" discusses how land regulations have led to higher costs and greater barriers in the process of constructing affordable housing. The paper argues that the lack of affordable housing has led to not only higher housing costs, but to economic impacts on marginalized communities. These impacts include further segregation between white communities and communities of color, wealth disparities, and economic immobility.

About the Author

The working paper is written by Michael Stegman, who has a strong background in the housing policy world. He has served under the Clinton Administration as assistant secretary for policy development and research at the U.S. Department of Housing and Urban Development. Under the Obama Administration, he served as a counselor for housing finance policy at the U.S. Department of the Treasury, and as a senior policy advisor for housing for the National Economic Council in the White House. He currently is a senior fellow in the Housing Finance Program at the Center for the Financial Markets at the Milken Institute.

Higher Prices and Greater Delays: The Data

A large portion of the article relies on a variety of data that illustrates the linkage between regulatory barriers and high housing prices, as well as reductions and delays in housing development. Examples of research regarding zoning influences over pricing include a Gyourko and Molloy study (2015) that estimated excessive zoning has artificially raised real house prices 56 percent above real construction costs. An examination of more than 100 cities in Florida led by Ihlanfeldt (2007) found that each additional restrictive land use measure raises prices of homes by 3 percent. Examples of these restrictive land use measures include parking requirements and residential conversion restrictions.

Beyond rising prices, regulatory barriers can also lead to delay of development or lack of development in general. Supporting research includes a Gyourko, Saiz, and Summers study (2008) that concluded in heavily regulated communities delays for development approval averages nearly a year, which is nine months longer than in lightly regulated communities. These findings are similar to trends found in other recent research, such as the Harvard's Joint Center for Housing Studies 2019 State of the Nation's Housing Report, which drew connections between high land costs and lack of affording housing. The National Apartment Association's Barriers to Apartment Construction Index also revealed that tightly regulated housing often means a less affordable housing market. 

How to Remove These Barriers

Given these data, it follows that regulatory barriers can cause a severe hindrance to building affordable multifamily housing. However, it is important to remember that some regulations, such as healthy housing, are important to protect tenants’ quality of life. Additionally, while removing regulatory barriers will not be enough to solve the affordable housing crisis, it should be an important strategy taken in conjunction with several others.

But this step will not be easy. Land-use and zoning are governed by state and local laws. However, because the United States is experiencing declining rates of economic mobility and productivity growth, Stegman sees the land use and zoning policies as a national problem. He cites federal policy suggestions from presidential candidates to remedy this national issue, many revolving around conditioning federal grants in aid. Another policy angle, which he sees as more effective, is using preemptive measures such as punishing states that do not make an adequate effort to ease the regulatory barriers. Punitive actions may include taking away the state’s ability to allocate tax-exempt bonds or low-income housing tax credits. Doing so is within Congress’s power under the Wickard v. Fillburn Supreme Court precedent. The court found that even if an individual’s activity is local and may not be regarded as commerce, it may still be reached by Congress if it exerts a direct or indirect substantial economic effect on interstate commerce. Because lack of housing can lead to lack of workers, Stegman makes the case that “substantial economic effects” are taking place.

There are stories of local and state governments successfully deregulating their housing markets. Examples include Minneapolis passing a zoning plan in December of last year that will build more affordable housing by allowing duplexes and triplexes in areas zoned for single-family. Oregon soon followed with a similar bill passed in August. While these practices are promising, Stegman views affordable housing as a national systemic issue that will need federal reforms. According to Ganong and Shoag (2015), state-level regulatory barriers have actually increased by nearly half between 1980 and 2010. According to the National Low Income Housing Coalition, there are only 35 affordable and available units for every 100 extremely low-income households nationwide, even with government financial support. Stegman not only cites the historical practice of using exclusionary land use regulations to segregate and disenfranchise marginalized groups, he  goes a step further to argue that these current regulatory policies negatively impact not only access to housing for these groups, but the overall economic growth and income equality of the United States. 

A Hsieh and Moretti (2019) study estimates that constraints to housing supply may have lowered aggregate United States growth by 36 percent from 1964 to 2009. Hsieh and Moretti argue that this missing 36 percent is due to the fact that a limited number of workers can access high productivity cities, such as San Francisco because multiple constraints mean there is not enough housing being built.

In a similar vein, the research completed at the University of Pennsylvania Wharton School and the Federal Reserve provides evidence that local housing regulations are reducing economic efficiency. A study led by Ganon and Shoag (2015) shows that due to the increase in housing regulation in high wage states, population growth has been stifled. This has led to a decline of income convergence across states. Income convergence is the macroeconomic hypothesis that poorer economies per capita incomes will tend to grow faster than richer economies, resulting in a convergence. The Ganon and Shoag study references that for a long while, incomes across states converged at a rate of 1.8 percent per year. However, in the period leading up the Great Recession there was essentially no convergence, which led to a large income gap. Ganon and Shoag argue that this standstill of income convergence across states is due to housing policies; that when housing supply becomes constrained in productive areas, housing becomes more expensive, especially for unskilled workers. Ganon and Shoag believe that pricier housing leads to a reduction of labor and human capital, both of which are crucial to rebalancing the income convergences. Poorer economies per capita income is no longer “catching up” to richer economies, which has exacerbated the income gap, and growing income inequality nationwide. 

The Affordable Housing Crisis as a Civil Rights Issue

Stegman’s call for a national response to the affordable housing crisis is not a new one. However, the message he sends of the weight housing policy puts on all aspects of the United States’ economic growth is worth repeating. When affordable multi-family housing is purposefully neglected for single-family housing, it particularly impacts low-income and minority households, because half of those households are renters. He also cites lack of affordable housing and exclusionary zoning as being a key element in the economic and wealth disparities between white families and families of color.

Not only does lack of affordable housing impact marginalized communities by limiting their resources and economic mobility, it affects all of the United States as it hinders what our productivity could be.  The policy solutions he offers in his “tool kit” are varied, and have been suggested by others. These solutions include:

  • Inclusionary zoning
  • Elimination of parking minimums
  • Allowing for micro-units (multiple small individual units in a single structure)
  • By-right development (a zoning code considered “by-right” is an approvals process streamlined so properties complying with zoning standards receive approval without a discretionary review process)
  • Multifamily/high-density zoning
  • Governmental policies to facilitate infill development (the rededication of land in an urban environment to new construction)
  • Standardized building codes
  • Form-based zoning codes that incorporate expedited permitting
  • Transit-oriented development (mixed-use around a transit station)
  • Mutable housing stocks that can convert from single family to multi-family (and vice versa) and zoning that allows conversions by right
  • Allowing accessory dwelling units (e.g. granny flats, English basement)
  • Taxing vacant land
  • Facilitating conversion of non-residential buildings to residential use
  • Flexibility in historic preservation and environmental regulation processes, particularly for affordable housing
  • Growth management programs that increase density when restricting land availability

More broadly, he calls for a national movement to call the affordable housing crisis what it really is–a civil rights issue. Advocacy from a diverse mix of community groups–from the affordable housing realm to the civil rights realm–is a crucial element for remedying the affordable housing crisis.

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