Zoning and the Cost of Housing: Evidence from Silicon Valley, Greater New Haven, and Greater Austin

Abstract

Municipal zoning, shockingly, may be the most consequential regulatory program in the United States. The Article develops metrics for measuring the extent to which a locality’s zoning practices are exclusionary, that is, limit the possible construction of least-cost housing. It applies the metrics to actual zoning ordinances and zoning maps, materials that legal scholars have seldom closely appraised. The municipalities chosen for study lie in three metropolitan areas, the ones listed in the Article’s title. Of the three, zoning in Greater Austin, one of the fastest growing metropolitan areas in the United States, is — to no one’s surprise — the most conducive to housing development. Austin suburbs have less large-lot zoning, more small-lot zoning, and fewer restrictions on the construction of multifamily housing. House prices in Silicon Valley, now commonly ten times the national median, were only slightly above the median in 1970. The extreme escalation of Silicon Valley housing prices has stemmed in significant part from its suburbs’ multifaceted efforts, after 1970, to limit further densification. Some towns in Greater New Haven, by contrast, adopted exclusionary policies as early as the 1930s. These towns’ enactments have distorted the region’s urban form and reduced its agglomeration efficiencies, but had little effect on housing prices. The Article surveys the zoning histories of the three regions, introducing, in due course, issues such as water supply, the structure of local government law, and racial demography. The final parts of the Article are more overtly normative. They present the case for boosting permitted residential densities in urban areas of the United States. To counter neighborhood NIMBYism, state legislatures should either preempt local discretion over what can be built, or reward localities that allow denser housing.