Out of Control Policy Blog

Regulations Driving Boston Housing Prices Higher

More evidence that regulation drives up housing prices -- this time from Boston -- brought to you courtesy of the venerable Harvard team of Edward Glaeser, et al.:

    Boston-area cities and towns are driving up housing prices by forcing developers to conform to an array of land-use rules that make it difficult to build new homes, according to a report that will be released this week.

    The report, which is based on a two-year survey of land-use rules in the 187 cities and towns within 50 miles of Boston, points to locally mandated lot sizes as large as 2 acres and overly restrictive wetlands and septic rules as the most significant barriers to housing construction. It also cites local prohibitions on irregularly shaped lots and "growth caps" limiting the number of units that can be built in a year. The survey did not include the city of Boston itself, where development is denser, or Cape Cod.

    Edward L. Glaeser, a Harvard University economics professor and the lead author of the study, said the oft-stated belief that housing in the Boston area is expensive because land is scarce is not accurate. Instead, Glaeser said, "the housing affordability crisis in Boston is manmade, created fundamentally by regulation."

    "I'm certainly not advocating the Houston solution -- I'm not advocating unfettered growth with no attention to the environment or to Boston's historic character," Glaeser said. But "we're hurting the region, we're hurting the country, by not letting the region develop to its economic potential."

Houston slam aside, his point is right on. For more on Glaeser's body of work on the impacts of regulation on housing prices, see here, here, and here.

UPDATE: The full study is available here.

Leonard Gilroy is Director of Government Reform


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