Land-Use Regulations Stifle Urban Growth

By Urban Reform Staff | Aug 16, 2017

Recently, UC Berkeley launched a tool to aid Bay Area residents and developers with “smarter housing development.” I find it alarming that the land-use regulations imposed by California localities are so restrictive that it requires the use of an app to cut through government red tape.

Berkeley’s tool is the “Housing Development Dashboard” and it’s made of two calculators. One is the development calculator and it alerts you of: affordable housing requirements, zoning, parking requirements, and density limits. Informing you on how those affect the development costs and it predicts the likelihood of the project coming to fruition. The second, the policy calculator, looks at government and market factors in the larger area of San Francisco, Oakland, Menlo Park, and Pleasanton on a per parcel basis.

Berkeley professor and faculty director of the center that produced the app had this to say:

“There is a tremendous pressure on the housing market and politicians and individuals want to do something about the affordability crisis in a desperate way.”

One can argue that the Bay Area has more of an availability crisis than an affordability crisis, regardless it is evident that the affordability crisis is in direct relation to the development regulations.

The Bay Area specifically, isn’t so expensive to live in because of the massive influx of people flocking to the area. It isn’t even expensive because of the quality of living or housing options available.

The San Francisco area is unaffordable because of one thing – overregulation.

The Bay Area’s land-use regulations are some of the strictest development regulations in the nation. They make this city and cities such as New York, Boston, and D.C. nearly inaccessible to younger would-be renters who are just entering the workforce and don’t want to live in a 600 square foot apartment with three roommates just for the honor of saying they live in “the city.”

The most restrictive of these land-use regulations are displayed in full force in San Francisco. Lot size and density restrictions, parking requirements, urban growth boundaries, and historic preservation (which isn’t always bad) are what drive the costs.

Studies have shown that these land-use regulations have broader implications than expected. They harm low-income people, reduce income mobility, and can also reduce economic growth. The four most restrictive cities are also some of the most productive places in the country yet they are preventing people from moving there who would otherwise contribute the most to local economic growth. One study shows that reducing San Francisco’s land-use regulations to that of the average American city would increase its GDP by 9.5 percent.

Another similarity with these overregulated cities is they tend to be led by progressive Mayors and city councils. The liberal regulation passed in city halls with the intention of making their city a “city of the future” actually has the adverse impact. Regulation that is truly in favor of growth, both in terms economic and population, would be less restrictive and wouldn’t require a specific tool to navigate through its nuances.

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