Housing Policy FAQs

+ Do strict land use regulations lead to higher housing prices?

Yes. Research shows that more restrictive land use regulations are associated with higher housing prices. Land use regulations are the rules, laws and codes that govern what can - or cannot - be built on a specific parcel. This includes zoning codes, subdivision regulations, building codes, and national, state, or regional rules on land development and permitting. The more restrictions on land use, the more difficult it is for the housing market to respond to demand in a specific town or neighborhood. A 2016 study found that in municipalities with greater regulatory restrictions, changes in demand led to increases in local housing prices rather than increases in supply. Closer to home, a 2011 study of localities in Massachusetts looked more specifically at minimum lot size restrictions. The researchers found that increases in minimum lot sizes were followed by significant increases in housing prices, and the impacts on the market

+ Does the construction of market rate housing accelerate gentrification?

No. Evidence shows that it does the opposite. It is understandable that residents of gentrifying neighborhoods who are feeling pressure from rising rents would see new, market rate development as fueling the problem; however, multiple studies have linked new, market rate construction in gentrifying neighborhoods to lower displacement rates. A 2016 study in California found that the production of market rate housing was associated with a lower probability that low-income residents in the neighborhood would experience displacement. Even more recently, results from two studies in New York City published last year showed similar conclusions: one found that for every 10% increase in housing supply (specifically market rate), rents for properties within 500 feet dropped by 1%; the other found that new, market rate buildings lower nearby rents by 5-7% relative to trend, and can even increase the amount of people able to move into these neighborhoods from low-income areas. An important factor to note is that these results are relative to current trends. Developers will not build where there is not demand; rather than catalyzing demographic change in previously stable neighborhoods, new market rate construction in low-income areas tends to come as a response to existing neighborhood change. Thus, rents do not necessarily fall, but they do not increase as much as they would without the additional supply. The new buildings slow the pace of rent increases by accommodating the pre-existing demand in neighborhoods already identified as “hot,” and reduce the displacement of current, lower-income residents.

+ Can market rate housing improve affordability?

Yes. Additions to the housing stock in one submarket (or price range) can fairly quickly affect other submarkets. Adding market rate housing in neighborhoods with higher demand alleviates competition for existing homes that otherwise drives up prices. When a neighborhood is in high demand, people are willing to pay more for homes that previously rented or sold for affordable prices. This is referred to as filtering up, as these more affordable units filter “up” into higher price ranges that are increasingly out of reach to low- and middle-income renters and buyers. A 2003 study found that units affordable to those with incomes at or below 35% AMI are more likely to filter up, or become unaffordable, in areas where housing supply is less responsive to demand (ex. More people want to live in a neighborhood, but very little new housing is built to accommodate the new demand). New market rate housing can absorb the demand from higher-income households, relieving upward price pressure on lower-cost homes. While allowing market rate construction will not address the needs of all households on its own, it does contribute to meeting demand at the high end and affects prices across all submarkets.

+ Can increasing density help the environment?

Yes. When housing supply cannot meet demand, or when land regulations increase sprawl, people travel further to and from city centers and employment opportunities, increasing individual automobile dependence and resulting in greater emissions. Further, regardless of commutes, the U.S. residential sector on its own consumes almost as much energy as the transportation sector, and emits nearly as much greenhouse gas. Yet, emissions are not uniform across housing types. For example, single-family homes consume 54% more energy for heating and 26% more energy for cooling compared to comparable multifamily homes. Additionally, increased density can lower per capita impacts on water quality by decreasing the amount of paved, impervious surface per household. One model found that, for a constant population, a doubling of standard suburban densities in most cases could do more to reduce water contaminants than many traditional stormwater best management practices. Finally, increased density lowers the rates of destruction of critical habitat and open space. Regulation that encourages only single-family home development contributes to the rapid consumption of land; as things stand, nearly one out of every three imperiled species in the U.S. is threatened by increased land development. Across the board, studies show that allowing increased density is an effective tool for combating climate change.

+ Do strict land use policies like exclusive single-family zoning perpetuate historical racial segregation?

Yes. Most zoning codes can be traced directly back to efforts to exclude people of certain races from specific neighborhoods or even entire towns. In addition to single-family zoning’s historical connection to segregation, research also finds a present-day association between land use restrictions and perpetuating income and racial segregation. A nation-wide study in 2015 found that more density restrictions directly lead to concentrations of affluence, and that increased local pressure to regulate land use is linked to higher rates of income and racial segregation. Given housing’s connection with our education system, residential segregation is even more concerning and is a direct cause of some of the glaring educational equity gaps in our communities. Land use regulations like exclusive single-family zoning not only limit the options of where families can live, they limit future opportunities for their children.

+ If I own my own home and have no plans to move, should I still be concerned about Massachusetts' housing shortage?

Yes. Housing prices and availability are directly related to job opportunities, and artificial constraints on the housing market have negative consequences on regional economies and local labor markets. A 2008 study published in the Journal of Urban Economics found that, compared to areas with less restrictive regulations, increases in demand for workers in cities with more restrictive land use regulations did not lead to increased housing supply, but instead to lower levels of long-run employment. High housing costs and slowed housing production lead to outmigration, making it difficult for businesses to recruit and retain qualified workers. As businesses seek a ready supply of labor elsewhere, this can result in slower job growth, outmigration of businesses, and decreased investment at the state and local levels. Regardless of your individual housing situation, we all have an interest in ensuring that Massachusetts remains an attractive place to live for people of all income levels.