Zillow pulled together an independent panel of economists and housing experts for the company’s Home Price Expectations Survey and found that relaxing zoning rules was overwhelming the panel’s suggestion to address the nation’s ongoing housing affordability crisis. In fact, 73 percent of those surveyed said zoning reform would be their first choice in addressing housing affordability—allowing more housing within existing neighborhoods and growing communities.
New housing construction has not recovered from the Great Recession, resulting in a 3.79 million–unit gap in home production in 230 metro areas, according to a study released by Up for Growth, a nationwide think tank that focuses on addressing the country’s housing shortage through research and evidence-based policies.
“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, the second-most-popular choice was to encourage governments to approve and build affordable housing more quickly, with 59 percent of economists believing it would be effective.
Other policy changes, including converting downtown commercial zones to encourage more residential use, providing tax credits to incentivize new home construction and relaxing design requirements, received modest support from the expert panel when compared to zoning reform, according to Zillow.
“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. “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.”