High construction and land costs will incentivize developers to build luxury units.
A new housing analysis challenges the conventional wisdom that deregulation and rezoning will automatically lead to more stock and cheaper prices.
The analysis, titled “Housing, Urban Growth and Inequalities,” was published by Utrecht University in the Netherlands and penned by Andrés Rodríguez-Pose and Michael Storper. In it, the pair said there is no clear evidence in either the U.S. or Europe that housing regulation is a major source of differences in home availability or price in cities.
Failure to regulate the housing market can lead to lost economic growth and create problems such as segregation, homelessness, barriers to social mobility and long commute times as lower-income earners are forced from city and job centers. The authors said the idea that housing will “trickle down” to lower earning workers has not happened. High construction and land costs will incentivize developers to build luxury units.
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