Does Lack Of Zoning Make Houston Housing More Affordable?

With Houston's housing market on the rise as once-hot U.S. markets head south, some economists argue the city's lax development controls allow housing supply to keep up with demand.

2 minute read

November 9, 2006, 9:00 AM PST

By Alex Pearlstein


"(Houston) missed the real-estate boom that sent home prices soaring on the East and West coasts. Now, with much of the nation's housing market in retreat, it has yet to feel even a tremor."

"Houston's gains are nothing like those seen in the past decade in the Northeast and California, but that may be the secret to Houston's success and the reason a bubble is unlikely to develop here. Land here is abundant, and the city has some of the least-restrictive land-use and construction rules in the nation. Those factors help supply to keep pace with demand and keep prices within reach of a broad range of potential buyers."

"Houston's model is in stark contrast to cities such as Boston and San Francisco, which have strict zoning, exacting building codes and laws governing historical preservation. Some economists, including Edward Glaeser of Harvard University, say excessive regulation in such cities has slowed construction to the point where demand has outstripped supply, fueling a run-up in home prices."

"In the once-sizzling markets where home prices are falling, housing costs are double, triple or even quadruple those of Houston. The danger, says Dr. Glaeser, is such places have priced out today's highly skilled 'knowledge workers,' forcing them to live in a more affordable locale where their contribution to the economy might not be as great. 'These are places where only the elite can live,' Dr. Glaeser says."

[Editor's note: Although this article is only available to WSJ subscribers, it is available to Planetizen readers for free through the link below for a period of seven days.]

Tuesday, November 7, 2006 in The Wall Street Journal

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