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. This Article develops metrics for measuring the extent to which a locality's zoning practices are exclusionary, that is, limit 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. Housing prices in Silicon Valley, currently by far the highest in the United States, were only slightly above the national 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 final parts of this 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.