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Why are Home Prices Soaring in Florida?

Leonard Gilroy
May 16, 2005, 7:55am

According to the Orlando Sentinel, home prices are soaring in many of Florida's major metropolitan areas: While population trends, interest rates, and speculative forces may indeed be important drivers of rising home prices in Florida, the article (not surprisingly) makes no mention of another possible culprit: land use regulation under Florida's statewide Growth Management Act. A 2001 Reason study found that: This study is but one piece of a large and growing body of research that points to a significant regulatory influence on home prices and housing affordability. As my colleague Adrian Moore pointed out last week, even the U.S. Department of Housing and Urban Development has recognized that state and local policies can drive up the cost of housing. See their Regulatory Barriers Clearinghouse for more info on this topic. So while the Sentinel article focuses on housing price drivers seemingly out of the control of public policy, they missed a golden opportunity to shed light on one key area in which public policy -- specifically, growth management regulations -- does influence housing price appreciation.

Leonard Gilroy is Director of Government Reform


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