Monday, December 7, 2009

Bento, Low, Knaap, & Chakraborty on Housing Market Effects of Inclusionary Zoning

Another interesting article off the wire from Vicki Been's SSRN Property, Land Use, & Real Estate Law digest.  Antonio Bento (Cornell), Scott Lowe (Boise State), Gerrit-Jan Knaap (Maryland), and Arnab Chakraborty (Illinois) have posted Housing Market Effects of Inclusionary Zoning.  The abstract:

This article presents an empirical analysis of the effects of inclusionary zoning policies on housing prices and starts in California during the period from 1988 through 2005. The analysis compares cities with and without such policies and isolates the effects of inclusionary zoning programs by carefully controlling for spatial and temporal conditions, such as the neighborhood or school district within which the house is located and changing market conditions over time. The analysis found that inclusionary zoning policies had measurable effects on housing markets in jurisdictions that adopt them; specifically, the price of single-family houses increases and the size of single-family houses decreases. The analysis also found that, although the cities with such programs did not experience a significant reduction in the rate of single-family housing starts, they did experience a marginally significant increase in multifamily housing starts. The magnitude of this shift varied with the stringency of the inclusionary requirements. Finally, the analysis found that the size of market-rate houses in cities that adopted inclusionary zoning increased more slowly than in cities without such programs. The results are fully consistent with economic theory and demonstrate that inclusionary zoning policies do not come without costs.

Matt Festa

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Here's what I've always wanted to know about inclusionary zoning ordinances - do they even begin to meet the need for affordable housing in the jurisdictions that have them? The percentage of affordable housing required in a development - between 10 and 20% - seems very arbitrary to me and unrelated to demand. Anyone know of any scholarship on this issue?

Posted by: Jamie Baker Roskie | Dec 7, 2009 11:09:06 AM

My colleagues and I have two articles that try to answer your question, and to address the effects that IZ has on the price and supply of housing. We found that in the suburban jurisdictions surrounding Boston, only about 1/2 of those with IZ had produced any units at all. As of 2003, 9,154 total units had been built across all 55 of the Bay Area jurisdictions with IZ programs. Collectively, these 55 jurisdictions issued just under 400,000 building permits between 1980 and 2006, so the affordable units produced under IZ made up approximately 2.3 percent of new residential units permitted during this period.

Our articles, one of which is being published in the J. Am. Plan. Ass'n, and the other in Urban Economics, are accessible at



Posted by: Vicki Been | Dec 8, 2009 5:20:12 AM

Apologies, I mis-typed: our report on the price and supply effects of IZ is being published in Urban Studies.


Posted by: Vicki Been | Dec 8, 2009 5:22:12 AM

Excellent - thanks, Vicki!

Posted by: Jamie Baker Roskie | Dec 10, 2009 12:22:58 PM