Zillow: Restrictive land regulations exacerbating tight housing inventory, rising rents

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Dive Brief:

  • A new Zillow report found that a city’s housing and land-use regulations significantly affect whether housing inventory and cost will be available to meet demand. Zillow said there are other factors that contribute to rising prices and low availability, but regulations are a major influencer.
  • Zillow found that municipalities with the most stringent land-use policies had rents that were three times higher than those areas with looser regulations and experienced a greater decrease in available rental inventory.
  • The same holds true for homebuilding. Restrictive building regulations lead to less construction and a smaller number of for-sale properties, which drives up home prices, according to Zillow.

Dive Insight:

In the last five years, rents in San Francisco — which has very tight building regulations — increased 42.4%. In contrast, Chicago, which has more builder-friendly regulations, experienced a median rent increase of just 7%. Generally, Zillow said, rents in the cities with the least restrictive land-use restrictions increased 6.1% over that same five-year period, but prices in cities with the tightest regulations rose 16.7%...Read the story

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