Most people who know anything about housing recognize that local government regulations substantially increase housing prices. In particular, much new housing costs a lot more than it needs to because of lengthy delays in obtaining planning permission and building permits, unnecessarily expensive additional construction requirements, minimum lot sizes or building sizes and set-back requirements, severe obstacles to creation of multifamily units, and widespread suburban hostility to anything approaching low-cost housing anywhere nearby. Therefore, the interesting issues are not whether or how local government regulations affect housing costs, but why do local governments keep adopting such regulations, and what can be done to change their behavior?
I must modestly admit that I am exceptionally well qualified to discuss this topic because I have been on two federal commissions that investigated it. One was the National Commission on Urban Problems (the Douglas Commission) in 1967 and the other was the Advisory Commission on Regulatory Barriers to Affordable Housing (the Kemp Commission) in 1989. I also submitted a paper in 2002 to the most recent federal commission on the same subject-the Millennial Housing Commission.
However, my approach differs from that of most other housing analysts. I will not focus on the particular obstacles posed by local regulations or how to modify them. Rather, I believe the really crucial issue concerns the political forces that create strong local government incentives to create and maintain such obstacles. However, I must warn readers that my views on this subject are