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Silver Bullet or Trojan Horse? The Effects of Inclusionary Zoning on Local Housing Markets

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  • Jenny Schuetz
  • Rachel Meltzer
  • Vicki Been

Abstract

Many local governments are adopting inclusionary zoning (IZ) as a means of producing affordable housing without direct public subsidies. In this paper, we use panel data on IZ in the San Francisco metropolitan area and Suburban Boston to analyze how much affordable housing the programs produce and how IZ affects the prices and production of market-rate housing. The amount of affordable housing produced under IZ has been modest and depends primarily on how long IZ has been in place. Results from Suburban Boston suggest that IZ has contributed to increased housing prices and lower rates of production during periods of regional house price appreciation. In the San Francisco area, IZ also appears to increase housing prices in times of regional price appreciation but to decrease prices during cooler regional markets. There is no evidence of a statistically significant effect of IZ on new housing development in the Bay Area.

Suggested Citation

  • Jenny Schuetz & Rachel Meltzer & Vicki Been, 2009. "Silver Bullet or Trojan Horse? The Effects of Inclusionary Zoning on Local Housing Markets," Working Paper 8519, USC Lusk Center for Real Estate.
  • Handle: RePEc:luk:wpaper:8519
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    File URL: http://lusk.usc.edu/sites/default/files/working_papers/wp_2009_1002.pdf
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    References listed on IDEAS

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    1. New Yimby City: A Roundtable Q&A with Open New York (Part I)
      by Jason Barr in Skynomics Blog on 2021-04-05 12:11:16

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    Cited by:

    1. Lehe, Lewis, 2014. "Inclusionary Zoning in a Monocentric City," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt6qp1j5bj, Institute of Transportation Studies, UC Berkeley.
    2. Youness Achmani & Walter T. de Vries & José Serrano & Mathieu Bonnefond, 2020. "Determining Indicators Related to Land Management Interventions to Measure Spatial Inequalities in an Urban (Re)Development Process," Land, MDPI, vol. 9(11), pages 1-15, November.
    3. W. Hughen & Dustin Read, 2014. "Inclusionary Housing Policies, Stigma Effects and Strategic Production Decisions," The Journal of Real Estate Finance and Economics, Springer, vol. 48(4), pages 589-610, May.

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