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Jobs and home values together have been on the upswing in the U.S., but looking at individual metros reveals that local residential land use regulation heavily impacts that correlation.
Home values in the most strictly zoned metros (think New York, San Francisco, Boston) grew an average of 23.4 percent, versus 9.4 percent in the least restrictive (examples include Indianapolis, Kansas City, St. Louis), Zillow's research shows. At the same time, job growth in the most restrictive metros grew 11.5 percent, and 7.5 percent in the least restrictive metros. Broadly, for every employment gain of 10 percent, home values grew 24.9 percent in the most restrictive metros.
But the national growth masks a great deal of variation among metropolitan areas. For example, in Denver home values rose 60.8 percent as jobs increased 22.6 percent, while in Atlantic City, N.J., home values fell 25 percent while jobs decreased 8.5 percent. Denver has become another tech hub and has a strong and diverse economy, while Atlantic City—once a tourist hub and one of the few places where you could go to gamble outside of Nevada—has struggled since the recession to regain an economic foothold, especially as rising seas and extreme weather have cause significant damage to the metro area.
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