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[OPINION] How local housing regulations smother the U.S. economy

Posted by   /  September 8, 2017  /  No Comments

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Houses fill the landscape near the Bay Bridge in San Francisco. Credit Jim Wilson/The New York Times

By Chang-Tai Hsieh and Enrico Moretti | The New York Times

(Editor’s note: Opinion pieces are published for discussion purposes only.)

If you live in a coastal city like New York, Boston or San Francisco, you know that the cost of housing has skyrocketed. This housing crisis did not happen by chance: Increasingly restrictive land-use regulations in the last half-century contributed to it.

But what appears to be several local housing crises is actually a much more alarming national crisis: Land-use restrictions are a significant drag on economic growth in the United States.

The creeping web of these regulations has smothered wage and gross domestic product growth in American cities by a stunning 50 percent over the past 50 years. Without these regulations, our research shows, the United States economy today would be 9 percent bigger — which would mean, for the average American worker, an additional $6,775 in annual income.

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