California Zoning: Housing Construction and a New Ranking of Local Land Use Regulation

California Zoning: Housing Construction and a New Ranking of Local Land Use Regulation

New survey data on residential land use regulation in California have allowed us to create the Mercatus-Augmented Terner California Housing Regulation (MATCHR) Index, which characterizes formal restrictions on density in 265 California jurisdictions circa 2018. To expand index coverage, we augment the original Terner California Residential Land Use Survey data with published regulatory data. The formal restrictions are internally correlated, and exploratory factor analysis yields a strong single factor that can be used as an index of regulatory intensity. By contrast, several informal restrictions we analyze, including delays and the probability of rejection, are not internally correlated and have weak, if any, correlation with the MATCHR Index. The MATCHR Index is significantly correlated with 2012–2018 housing supply growth adjusted for demand and density. The correlation relies, however, on extreme values. Among municipalities with a MATCHR score within one standard deviation of the mean, we detect no systematic differences in growth. Informal restrictions have even less predictive power than formal ones: they show little relationship with growth outcomes even at the extremes. Our findings suggest that local California policymakers who want to increase housing supply may need to implement major policy changes.

Salim Furth and Olivia Gonzalez

Mercatus Research

August 28, 2019

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By |2019-08-29T10:35:31-07:00January 1st, 2018|Land Use Regulation, Political Economy, Reference|