Yesterday, Niskanen’s Samuel Hammond tweeted a paper describing the association between homelessness and the stringency of land-use regulation.
“The data reveal a striking positive relationship between the degree of homelessness across states and the stringency of local housing market regulation.” https://t.co/O9N7dANP1Q
— Samuel Hammond 🥑 (@hamandcheese) September 18, 2018
The paper, written by Steven Raphael and published by the Fisher Center at the University of California, Berkeley, identifies a clear link between land-use regulation, housing affordability, and homelessness:
This chapter explores the potential importance of local housing market regulation in determining homelessness in the U.S. I begin with a theoretical discussion of the connection between the operation of local housing markets and the risk that a low income individual or family experiences homelessness. The chapter then turns to a discussion of local housing market regulation and the impacts of such practices on housing costs. I review the existing empirical literature documenting these connections and investigating differences between the operation of less and more regulated housing markets. I also present an empirical profile of more and less regulated housing markets in the U.S. This profile demonstrates that more regulated markets experience slower growth in housing, produce less higher quality housing, experience higher housing price appreciation, and experience much larger increases in the budget shares that renters (and particular, low income renters) devote to housing expenditures. Finally, using a new state-level regulatory index presented in Gyourko, Saiz, and Summers (2006) and the single- night homelessness count presented in the 2008 Annual Homelessness Assessment Report to Congress (AHAR), I explore the direct relationship between housing market regulation and homelessness. The data reveal a striking positive relationship between the degree of homelessness across states and the stringency of local housing market regulation.
The link between affordability, regulatory stringency, and homelessness is fairly intuitive, but the projected magnitude of the decline in homelessness that would come from deregulating to the median or least-regulated state deserves special attention.
Raphael finds that reducing the regulatory burden across the U.S. to the median or least-regulated level would reduce homelessness by 46,246 and 144,294 people, respectively.
[T]hat cities that require a greater number of independent reviews to obtain a building permit or a zoning change have higher land prices, ceteris paribus. Finally, we relate the variation in land prices to the prices paid for housing in the region and show that local land use regulations are closely linked to the value of houses sold. This is in part because regulations are so pervasive, and also because land values represent such a large fraction of house values in the San Francisco Bay Area.
Independent reviews, where local authorities such as zoning boards provide input and can decide the fate of a given construction project, are a particularly effective tool for NIMBYs because they (1) turn development into a plot-by-plot struggle, rather than a question of comprehensive reform and (2) the highly localized forum in which the reviews take place gives homeowners greater influence over the process. (For some truly ridiculous arguments against a development in Berkeley, California, see the arguments some Berkleyans made against a development in a local advisory meeting.)