This is a fantastic article. Burdensome regulations on housing construction have caused costs to skyrocket. Minimum lot sizes, setback requirements, square footage minimums, floor-area ratio restrictions, overzealous height restrictions, parking requirements, abuse of environmental reviews, historic designations, community reviews, overzealous MFH requirements (like double-stair), below-market mandates, all have work…
> Burdensome regulations on housing construction have caused costs to skyrocket. How much have costs increased, and what tells us that it's regulations, not many other causes? Also, which regulations? Some are more valuable, some less, and inevitably some will misfire. I'm not just going to trust real estate developers, who have their own interests, to meet other needs. > below-market mandates I'm not sure we need mo…
> I'm not sure we need more high-end development - those tenants have plenty of options.
Evidence is strong that market-rate construction causes richer residents to exchange their current unit for a higher-end unit, opening up supply at the lower end. [3]
The problem with BMR requirements is the increased costs borne by developers, who have to offset those increased costs by charging more for the market rate units. There's a limit to that market, so fewer units are constructed than otherwise would be. Middle class families are especially worse off, as they neither qualify for BMR lotteries, nor earn enough for the rapidly accelerating market-rate unit. [4]
Further, rents are lower in states that disallow BMR mandates (like Texas) than those that have BMR mandates (like California).
1. https://www.axios.com/2019/08/28/study-californias-land-use-... 2. https://www.cnn.com/2023/08/05/business/single-family-zoning... 3. https://www.lewis.ucla.edu/research/market-rate-development-... 4. https://escholarship.org/content/qt036599mr/qt036599mr_noSpl...