Are restrictive zoning laws making housing unaffordable? There’s a strong argument that the high cost of housing in markets like New York, Boston, and San Francisco is at least partly the result of tight restrictions on new construction. One person sounding the warning is Randal O’Toole, a research fellow with the libertarian-leaning Independent Institute, an Oakland-based think tank, and director of the American Dream Coalition. Here’s an excerpt from a piece he wrote last week for the San Francisco Chronicle:
In fact, planning-induced housing shortages added $30 billion to the cost of homes that Bay Area homebuyers purchased in 2005. This dwarfs any benefits from land-use restrictions; after all, how livable is a place if you can't afford to live there?
... The people most enthused about all these planning rules like to call themselves ''progressive.'' But the effects of planning on home prices are entirely regressive. Planning-induced housing shortages place enormous burdens on low-income families but create windfall profits for wealthy homeowners. Does this steal-from-the-poor, give-to-the-rich policy reflect the Bay Area's true attitudes?
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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.