Zoning restrictions for houses – Why they will be detrimental to the well being of poor people

In some towns and cities land is divided into residential, commercial and industrial zones. Within those zones additional requirements must be strictly adhered to, which are defined by zoning restrictions. Those restrictions can be very detailed. For example, a residential zone may only allow single-family homes, a minimum size of rooms, a certain roof and so on. Increasingly stringent land use regulations have an enormous impact on a zone, such as higher housing prices and higher land prices.

Because of zoning restrictions it will become more difficult to build for developers, which in turn will notably limit housing construction and consequently housing supply. Especially in urban areas, this will be an increasing problem for the poor people. There won’t be enough affordable housing supply.

Furthermore, more and more people will move to the city, because of better job perspective, a better infrastructure of doctors, schools, et cetera. But because of zoning restrictions, which are supported by the wealthy because they want to remain among their peers, the poorer ones will be forced to move to zones where they can afford living, which mostly are more far away from the center of the city or from the spots where jobs and a better infrastructure is located. Some of the consequences for poor people could be, that they will need more time to get to work or even will have difficulties to find a work, that they will be in an environment with a worse infrastructure and that they will be clustered among their peer.

All in all, zoning restriction will lead to a greater economic segregation and a growing gap between rich and poor ones, notably in cities.

Source:

Glaeser, Edward L., Ward, Bryce A. 2009. The causes and consequences of land use regulation: Evidence from Greater Boston. Journal of Urban Economics 65, 265–278.

Quigley, John M., Rosenthal, Larry A. 2005. The Effects of Land Use Regulation on the Price of Housing: What Do We Know? What Can We Learn? Cityscape: A Journal of Policy Development and Research 8 (1), 69-137.