Housing supply

How Suburban Sprawl’s Single-Family Home Zoning Limits Housing Supply

America’s suburbs are expanding again.

Last year, single-family housing starts hit 1.123 million, the highest since 2006, according to the National Association of Home Builders, but options for potential buyers remain slim.

Experts say the problems in the US housing market are tied to past political decisions. In particular, they say restrictive zoning codes limit the supply of housing. These codes are based on the 1930s Federal Housing Administration guidelines for mortgage underwriting. That includes “no sidewalks and winding dead-end streets,” according to Ben Ross, author of “Dead End: Suburban Sprawl and the Rebirth of American Urbanism.”

Ross and others believe more needs to be done to manage residential real estate development. Ross lives in Montgomery County, Maryland, which recently revised its zoning code to increase population density in the area. The county didn’t have many alternative options – 85% of the building land is already developed.

Strict zoning laws favoring single-family homes have limited the supply of land available for multi-family construction and hampered the production of more affordable housing. With limited land for multi-family projects, the price of such land has jumped and made such projects unaffordable for builders.

Today’s homebuyers are paying for the sprawl of the past by tapping into credit to fund their lifestyles. Meanwhile, the cost of maintaining public infrastructure weighs on the depopulation of cities across the country.

If not, how does suburban sprawl shape the US economy? Watch the video above to find out.