The Atlantic senior associate editor Gillian B. White takes a close look at whether zoning laws are making inequality worse.
She looks at the argument made by Jason Furman, the economist and chairman of the Council of Economic Advisers, during a recent speech at the Urban Institute. White explains:
In order to calculate the impact of land-use restrictions on the final price of housing, researchers compare the sale price of a structure with the actual cost of constructing it (which includes labor and material). The difference between the two is what a buyer is paying for the land, and that cost is higher in places where laws governing land use and zoning are stricter.
Though the amount of land in any city is of course fixed, if developers can build as high as they’d like, or wherever free land is available, space would seem somewhat less scarce. But zoning regulations help create artificial scarcity, and the price of land skyrockets as a result.
Read more to learn how the high price of housing is dangerous to the overall economy.
Also, check out our own, earlier, story on the topic, Board Stiff, by BUILDER's Les Shaver.