Why Housing Costs Are So High

by Frank Mazur

There’s an increased focus on providing more affordable housing across our country.  Citizens/churches are seeking ways to address this issue but few are addressing why this housing void has occurred.  Recently, Vanessa Brown Calder from the CATO Institute released a policy paper on how local zoning and land use regulations are making housing unaffordable.

Calder’s research shows that rising land-use and zoning regulations are associated with increased home prices.  States that have increased the amount of rules and restrictions on land use have higher housing prices.  She concludes that if state and local governments overhaul their development rules housing prices would be more affordable.

There’s also a correlation that shows states/municipalities with restricted/overreaching regulations rely on Federal housing aid like Sec. 8, public housing and Low-Income Housing Tax Credits.  Federal subsidies create disincentives to solve the problem at the state and local levels thereby rewarding these counterproductive policies that also create more dependency on government.

The Northeast scores the highest in restrictive land-use regulations and constricting zoning rules.  Vermont is near the top as the “least-free state over all.”  Most southern states like Florida have the least restrictions and more affordable housing.

Calder recommends that rather than think the Federal government will solve housing affordability, state and municipalities need to streamline the approval process, provide incentives to local municipalities to reduce regulations and provide land-owner reimbursement when the highest and best use of their land is restricted.

As Pogo says…”We have met the enemy and he is us”.

Frank Mazur is a former Representative from South Burlington, he was chairman of the House Transportation Committee, and served a board member for the Ethan Allen Institute.

{ 2 comments… read them below or add one }

Valerie January 10, 2018 at 9:26 pm

My Mom had a little apt. off her house which she rented to offset some of the high cost of taxes. Renters got to stay for 5 months without paying rent, going through the courts to evict them. This cost her hundreds of dollars for court and sheriff fees. Add to that the thousands of damage done to the newly renovated apartment. It’s now re-rented at a higher cost to offset some of the damage done and higher taxes she’s paying. Rising taxes and the non-rights landlords receive adds up to high and unaffordable rents.

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Greyling Van Alstyne January 13, 2018 at 12:13 pm

Valerie is absolutely right. Same thing happened to me not once, but three times. The State gave rent money to the renters who did not give it to me. Lost income, lawyer, court costs and Sheriff fees amounted to $15,000. Not counting the over $5000 damage done to what used to be a nice house.
The good news is; I have one more payment to make on the high interest loan I had to get Two years ago to pay the property tax bill ( over $7000 a year )

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The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.
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