Americans vote with their feet for areas with lower housing costs – and less restrictive zoning

August 7, 2014

This recent New York Times article describes how Americans are increasingly voting with their feet for states and localities with more affordable housing, such as Oklahoma and Texas:

Americans have never hesitated to pack up the U-Haul in search of the big time, a better job or just warmer weather. But these days, domestic migrants are increasingly driven by the quest for cheaper housing.

The country’s fastest-growing cities are now those where housing is more affordable than average, a decisive reversal from the early years of the millennium, when easy credit allowed cities to grow without regard to housing cost and when the fastest-growing cities had housing that was less affordable than the national average. Among people who have moved long distances, the number of those who cite housing as their primary motivation for doing so has more than doubled since 2007.

The Times notes that this trend is in part driven by tighter standards in mortgage lending since the collapse of the housing bubble. It has become tougher for homebuyers to get low-interest mortgages for potentially risky purchases. As the article points out, a variety of factors influence the affordability of homes in a particular region. But a big one is the extent to which local zoning regulations artificially reduce the supply of housing, as is often the case in many East Coast and California cities:

During the bubble, people coming from the most expensive places viewed even moderately expensive housing in places like Phoenix as a bargain, especially if they expected the value of such housing to rise, says Edward Glaeser, a Harvard economist who studies cities.

But, Mr. Glaeser says, there is also a historical trend driven by severe restrictions on building new housing in highly regulated cities like San Francisco, Washington and New York. Whereas high housing prices were once a sign of growth because they indicated strong demand, now they are more a function of limited supply.

As I discussed in this 2011 post, similar developments have led many African-Americans to migrate to the South (where zoning restrictions tend to be weaker) from northern cities such as New York – a reversal of historical trends. Economist Edward Glaeser, quoted in the Times piece, has been making the case against restrictive zoning laws for years. He summarized his arguments in this 2008 article.

Ilya Somin is Professor of Law at George Mason University. His research focuses on constitutional law, property law, and popular political participation. He is the author of "The Grasping Hand: Kelo v. City of New London and the Limits of Eminent Domain" (forthcoming) and "Democracy and Political Ignorance: Why Smaller Government is Smarter."
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