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Wednesday, July 29, 2015

Zoning v. Economic Opportunity

Ilya Somin writes at The Washington Post:
In a recent study for the Mercatus Center at George Mason University, economist Steven Horwitz points out that restrictive zoning laws impede social mobility by making it difficult or impossible for the working class and poor to establish home-based small businesses...

This is just one of several ways in which restrictive zoning policies harm the poor. An even more significant one is the way in which restrictions on new development artificially inflate the price of housing in many cities, thereby pricing many of the poor and working class out of the market. Economists have been criticizing such policies for many years. It isn’t just libertarians and free market advocates like Horwitz and Edward Glaeser of Harvard. Leading left-wing economists and policy analysts, such as Paul Krugman and Matthew Yglesias, have decried restrictive zoning as well. In some of the most desirable coastal cities, zoning inflates the price of housing by as much as 50 percent. When the poor are priced out ofthe housing market, they lose not only the housing itself, but the opportunity to seek out employment opportunities in the areas in question.