With strict zoning laws and costly regulation, home building in these heavily-regulated, expensive cities can have builders feeling like they’re working in the Twilight Zone. The national average amount of time from a project’s start to finish is 111 days, or almost three-and-a-half months. In regulation-heavy cities such as San Francisco, builders can expect to add over five months to the national average, up to 252 extra days. And it may take even longer as experts say regulation is going to get worse, not better. Let the headaches begin.
Heavily-regulated land-use zoning has become the norm across the United States over the last decade — and there’s strong reason to believe that has driven housing costs higher in many cities.
But in some parts of the country, land-use zoning is particularly stringent.
A new working paper from researchers at the University of Pennsylvania and Harvard University examined the change in local zoning laws since 2006, based on survey data collected in 2006 and in 2018. Using that data, the researchers created an index that calculated where land-use regulations were the most onerous.
The San Francisco metropolitan area came in first in that ranking, followed by New York City and Providence, R.I. Overall, many of the cities that placed highly on the index are known for their costly housing markets, such as Seattle, Washington, D.C. and Los Angeles. (The ranking included metro areas where researchers recorded 10 or more responses from different communities located in those cities.)
Some have argued that the concerns related to zoning and the demand for new housing need to be addressed at a national, and not a local, scale. “There is no incentive for local municipalities to change anything because homeowners vote, and homeowners understandably want to protect their home values,” said Nela Richardson, an investment strategist at Edward Jones and the former chief economist for real-estate brokerage Redfin RDFN, -1.13%.
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