Academics Claim Single Family Homes Drive up Housing Costs, Hurt Lower and Middle Class Home Ownership

Row of middle-class houses on American suburban street - Getty Images stock photo.
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Academics are driving the narrative that people who want to live in single family homes that include land are driving housing costs up and preventing lower and middle class Americans from owning homes.

Researchers at the University of Pennsylvania concluded that “restrictive zoning, intensive permitting procedures and state laws that have historically allowed local groups” — or people who want to live in comfortable and safe suburbs — “to block residential development.”

The San Francisco Chronicle reported on the analysis, citing the need for housing in the California Bay Area and how single family homes increase housing costs and decrease housing opportunities:

To quantify this, they estimated the difference between what homeowners in large metropolitan areas across the U.S. are willing to pay for additional land they can have as part of their own lot — but cannot build on or subdivide so they can sell to someone else — and what prospective home builders in those areas are willing to pay for the same amount of land to construct single-family homes on.

The researchers called the difference between how much land actually costs and how much it would cost without restrictive zoning the “zoning tax.” It’s not actually a government tax — just the estimated amount that artificial supply constraints, like zoning laws and permitting delays, add to the price of land across different metropolitan areas.

In a working paper published by the National Bureau of Economic Research, the researchers found that in the San Francisco metropolitan area (which includes San Francisco, Alameda, Contra Costa, Marin and San Mateo counties), the median “zoning tax” for a quarter-acre of land was $409,000 — more than four times the region’s median household income.

The Chronicle reported that even a Google software developer who makes $200,000 a year would allegedly struggle to buy a house.

“That’s how you know it’s expensive, when Google engineers are getting priced out” of a median home, Joseph Gyourko, an economist at the University of Pennsylvania and the study’s lead author, told the Chronicle.

 “And if you’re making closer to a traditionally middle-class wage, forget about homeownership,” the Chronicle reported. “And while his study did not explicitly examine the impact of “zoning taxes” beyond land used to purchase single family homes, Gyourko said it’s likely that these taxes cause apartments and condominiums to be more expensive as well.”

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