How to Increase Housing Affordability? Understanding Local Deterrents to Building Multifamily Housing

77 Pages Posted: 27 Apr 2022 Last revised: 5 Dec 2022

See all articles by Amrita Kulka

Amrita Kulka

University of Warwick

Aradhya Sood

University of Toronto

Nicholas Chiumenti

Federal Reserve Banks - Federal Reserve Bank of Boston

Date Written: December 2, 2022

Abstract

This paper studies how various zoning regulations interact to affect housing supply and affordability and which regulations policymakers should relax if they want to reduce housing prices. Using cross-sectional variation across space from novel parcel-level zoning data and a boundary discontinuity design at regulation boundaries in Greater Boston, we causally estimate the effect of various zoning regulations on the supply and prices of single- and multi-family homes. We find that relaxing density restrictions (minimum lot size and maximum dwelling units), alone or jointly with relaxing other regulations, is most effective at increasing supply, particularly of multi-family properties, and reducing rents and house prices. Conversely, enabling multi-family zoning or relaxing height regulations alone has little impact. In addition, our results suggest that the recent Massachusetts policy to increase building density near transit stations can increase housing affordability by reducing rents and sale prices in suburban municipalities.

Keywords: multi-family zoning, height restrictions, density, house prices, rents

JEL Classification: R21, R31, R58, H11, K25

Suggested Citation

Kulka, Amrita and Sood, Aradhya and Chiumenti, Nicholas, How to Increase Housing Affordability? Understanding Local Deterrents to Building Multifamily Housing (December 2, 2022). Available at SSRN: https://ssrn.com/abstract=4082457 or http://dx.doi.org/10.2139/ssrn.4082457

Amrita Kulka

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, CV4 8UW
United Kingdom

Aradhya Sood (Contact Author)

University of Toronto ( email )

105 St George St
Toronto, ON M5S 3E6
Toronto, Ontario M5S 3E6
Canada

HOME PAGE: http://https://www.aradhyasood.com

Nicholas Chiumenti

Federal Reserve Banks - Federal Reserve Bank of Boston

600 Atlantic Avenue
Boston, MA 02210
United States

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