Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/273031 
Year of Publication: 
2022
Series/Report no.: 
Working Papers No. 22-10
Publisher: 
Federal Reserve Bank of Boston, Boston, MA
Abstract: 
This paper studies how local land-use regulations and community opposition affect the trade-offs to building single-family, multifamily, and affordable housing and how their effects on rents differ from their effects on house prices. Using lot-level zoning regulations and a boundary discontinuity design at regulation boundaries in Greater Boston, we obtain causal estimates for the effects of zoning regulations on the supply of different types of housing, single-family-house prices, multifamily rents, and households' willingness to pay for higher density. We find that relaxing density restrictions (minimum lot size and maximum number of dwelling units)-either alone or in combination with relaxing maximum-height restrictions or allowing multifamily housing-is the most fruitful policy reform for increasing the housing supply and reducing multifamily rents and single-family-house prices. However, adopting multifamily zoning or relaxing height regulations alone has little effect on the number of units built or on rents. Moreover, in each land-use relaxation scenario where rents fall, house prices also fall, complicating the political economy of land-use reform. We also find that mature suburbs that are closer to a city center and have a representative town meeting structure of local governance are the most restrictive with respect to adding multi-unit housing. Furthermore, inclusionary zoning policies such as Massachusetts's Chapter 40B rarely substitute for relaxing zoning regulations, particularly restrictions on building multifamily housing.
Subjects: 
multifamily zoning
height restrictions
density
house prices
rents
JEL: 
R21
R31
R58
H77
H11
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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