Working at cross-purposes to their own stated policies of promoting affordable housing, local governments in the Washington-Baltimore region have enacted land use restrictions that jack up the price of a single-family house by $75,000 and the cost of a townhouse or condo by $60,000, according to a new Demographia study, “Residential Land & Regulation Cost Index: 2010.” The only place worse than D.C. and Baltimore is San Diego, where land use regulations alone add more than $220,000 to the price of a new entry-level home.Interest on that additional $75,000 stretched out over 30 years significantly increases a homebuyer’s monthly mortgage payment, pricing many young families out of the market. But that’s far from the only cost. As urban policy analyst Wendell Cox points out, between 2000 and 2009, higher housing prices created a brain drain, as 1.2 million people fled from places with highly restrictive land use policies to less-regulated areas. Meanwhile, “the net domestic migration to the five highly regulated areas (including the Washington-Baltimore region) was approximately zero.”
The irony is that land use restrictions enacted to control “sprawl” encourage what Cox calls “leap-frog development” outside the restricted areas. It’s not unusual for D.C. commuters to drive in from less expensive communities in south central Pennsylvania, West Virginia, Maryland’s Eastern Shore, and Stafford and Spotsylvania counties in Virginia. This mega-sprawl puts even more stress on highways and air quality than would be the case if developers were allowed to build closer in to the urban core.
No matter how much local politicians yammer about how much they support affordable housing, they are the principal cause of the problem via their land use restrictions, such as the urban growth boundary in Montgomery County and large-lot zoning in Loudoun County. Such policies accomplish exactly the opposite of what their backers’ intended. By reducing the supply of available land and increasing the cost to build on it, they encourage the construction of larger, more expensive homes — even as they spend taxpayer money on schemes to create more affordable housing that their existing land use restrictions directly undermine.
The international study — which looked at land use restrictions in five other countries besides the United States — concluded that “in no market did housing become unaffordable by historic standards except where there are restrictive land use regulations.” So local officials have a choice. They can either champion smart growth or affordable housing, but it’s disingenuous to tell the public that they’re doing both.
