Zoning ordinances and the like have been endemic in the United States for the better part of a century. These laws have always influenced the location of housing within a given metropolitan area—that was their whole point. But until relatively recently, they didn’t have much of an impact on the total amount of housing built. Since the 1970s, though, increasing restrictiveness in America’s big coastal cities has caused new housing supply to lag behind rising demand, resulting in a big, artificial boost to housing prices. According to Harvard economist Edward Glaeser’s calculations, this “regulatory tax” equals roughly 20 percent in Baltimore, Boston, and Washington, DC. In Los Angeles and Oakland, it surpasses 30 percent. And in Manhattan, San Francisco, and San Jose, the regulatory tax has reached roughly 50 percent.
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