search

The Real Deal Logo

Trending

Rent board’s 4% hike will “plunge” buildings into distress: landlordsRent board’s 4% hike will “plunge” buildings into distress: landlordsLawmakers reach sweeping housing deal with “good cause eviction,” new 421aLawmakers reach sweeping housing deal with “good cause eviction,” new 421a“Investing before the ‘all clear’ sign”: Jon Gray on Blackstone’s $10B apartment deal“Investing before the ‘all clear’ sign”: Jon Gray on Blackstone’s $10B apartment dealParkmerced's $1.8B debt heads to special servicingParkmerced's $1.8B debt heads to special servicing
Residential
New York

Land-use restrictions hobble US housing supply: report

As young people flock to cities, zoning and land costs limit supply

Bleecker Street in the Greenwich Village historic district, an example of an area with restrictions (Credit: Getty Images)
Bleecker Street in the Greenwich Village historic district, an example of an area with restrictions (Credit: Getty Images)

U.S. housing prices are on the rise, and yet fewer new homes are being built than in past cycles. One possible explanation is that more demand now focuses on city centers, where high land prices and zoning restrictions make it difficult to build.

The number of new construction residential property sales in urban cores was significantly higher in 2015 than in 2000, according to an analysis by construction services site BuildZoom. Meanwhile, sales of properties more than 10 miles removed from city centers were more than 50 percent below 2000 levels.

Sign Up for the undefined Newsletter

“The expensive cities tend to be shifting toward a paradigm that says having a better location is better than having a fresher, greener, newer place,” BuildZoom chief economist Issi Romem told the Wall Street Journal.

High land prices in urban cores have also pushed developers to build more luxury housing, not the affordable apartments needed to house a growing population of young professionals, the Journal reported.

Romem argued that cities can address the issue by loosening land-use restrictions. He pointed out that in cities with looser restrictions, such as Austin, starter home sales are on the rise. [WSJ] — Konrad Putzier

Tags
City Council Land Use CommitteeZoning