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Cascade Policy Institute: The Housing Affordability Crisis: The Role of Anti-Sprawl Policy

January 15, 2019
By Randall Pozdena

This study examines the link between anti-sprawl regulations and spectacular increases in housing costs.

Many states adopted smart growth policies in the last five decades—enough time for the policies to have demonstrated their purported advantages. The evidence, at least on the housing front, is that the cost-containment claims have not materialized.  Instead, many urban areas are finding themselves with home prices that make ownership and rental of housing increasingly unaffordable. Cities and states are thus using or considering additional regulations and subsidy policies to provide their residents with more affordable housing.  There is virtually no discussion of whether anti-sprawl regulatory interventions precipitated the housing crisis, let alone consideration of abandoning the policy.

This study  measures the extent of site supply restrictions and its impact on housing prices using an economic model of housing markets, data on the economic conditions in housing markets, and trends in development revealed in satellite inventories of US land uses. Because Oregon has among the longest-standing and most aggressive implementations of smart growth land use policy, we pay particular attention to the state.