An independent panel of 117 economists and housing experts polled in Zillow’s Home Price Expectations (ZHPE) Survey have suggested that relaxing zoning rules is one of the best ways to address the nation’s ongoing housing affordability crisis as it would allow more housing within existing neighborhoods and communities. 73% of those surveyed ranked this solution as one of the most effective means to address affordability.
“It seems straightforward: We need to build more homes,” said Dr. Skylar Olsen, Zillow’s chief economist. “Changes through policies like modest densification will give us more ‘at bats’ to create density and help communities stay livable for everyone. Without a huge injection of new homes in the near future, affordability will continue to be a challenge for many — especially for first-time home buyers.”
Panelists were asked to select several policies they believe would improve housing affordability and to rank the policies by effectiveness. While changes to zoning was the clear favorite for policy choice among panelists, the second-most-popular choice was to encourage governments to approve and build affordable housing more quickly, with 59% of economists believing it would be effective. Other policy changes, such as converting downtown commercial zones to encourage more residential use, providing tax credits to incentivize new home construction and relaxing design requirements such as parking mandates, received modest support from the expert panel.
“Restrictive and exclusionary zoning, artificial barriers, and NIMBY opposition have combined to create an unprecedented and persistent housing shortage,” said Mike Kingsella, CEO of Up for Growth, an industry think tank. “Failure to address these issues will create lower economic output and fewer opportunities for everyone. Families and individuals will be forced to pay higher rents, the equity gap will widen, and transportation costs will rise as people are forced to travel greater distances for work and education.”