- Over the past five years, rents in cities with the most-restrictive land use regulations grew almost three times as quickly as in cities with the least-restrictive regulations.
- Controlling for changes in demand, more-regulated cities experienced a larger drop in inventory than less-regulated cities.
- Tightly regulated cities with higher rents and lower inventory have more adults living with roommates.
In many American cities, more means more – and not in a particularly good way. More tightly regulated land use in these cities is associated with more rapidly rising rents, more acute shortages of homes for sale and more adults living with roommates in the face of rising housing costs and fewer housing options.
While a number of factors impact growth in rents and the number of homes for sale in a given market, local housing and land-use regulation are inextricably linked to a city’s ability to ensure it has enough housing to meet demand. Using theWharton Residential Land Use Regulation Index[1] and data from the U.S. Census, combined with Zillow data on rents and inventory, Zillow analyzed the relationships between land-use regulation and:
- Percent change in median rents
- Percent change in the share of homes for sale
- The number of adults per household