Sunday, January 1, 2006
The Boston Globe today has an interesting article (registration required) on a forthcoming report by Harvard Economics Professor Edward L. Glaeser on the impact of regulation on housing prices in the Boston area. Some excerpts:
The report, which is based on a two-year survey of land-use rules in the 187 cities and towns within 50 miles of Boston, points to locally mandated lot sizes as large as 2 acres and overly restrictive wetlands and septic rules as the most significant barriers to housing construction. It also cites local prohibitions on irregularly shaped lots and ''growth caps" limiting the number of units that can be built in a year. . . .
Glaeser proposes several possible solutions, all of which would give the state a greater role in local development. He says Massachusetts could withhold state money from communities that block development, or create a single entity or regional entities that could overrule local officials. It also might limit lawsuits against developers by forcing losing plaintiffs to pay the developer's legal costs, or replace local land-use regulations with impact fees -- set by the state -- that developers would have to pay to cities and towns. . . .
Glaeser found that large minimum lot sizes have the most potent impact on price: An additional acre in minimum lot size raised the median sales prices of homes in a given town by 19.5 percent in 2001. When communities increase minimum lot sizes by a quarter of an acre, about 10 percent fewer homes are permitted, Glaeser found. When towns impose wetlands rules that are stricter than what the state requires, new construction appears to fall by about 10 percent, and stricter rules for septic systems decrease construction by 4 percent.
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