Local Zoning Laws and the Supply of Multifamily Housing in Greater Boston Local Zoning Laws and the Supply of Multifamily Housing in Greater Boston

By Aradhya Sood and Nicholas Chiumenti

Housing affordability is a significant issue in many U.S. metropolitan areas, including Greater Boston. Affordability has always been a major challenge for low-income renters; however, even middle-income families now face considerable affordability hurdles, particularly in metro areas with strong labor markets. Where people live has important implications for their health, schooling, and economic mobility. Researchers and policymakers have devoted attention to the role of land-use practices, such as regulating residential zoning, in creating housing affordability problems, particularly in the context of single-family houses. This paper studies how zoning regulations influence affordability in the context of multifamily housing, focusing on Greater Boston. It finds that reforms such as relaxing housing-density restrictions could lead to meaningful increases in the supply of multifamily housing and reductions in rents.

This report examines how multifamily zoning, relaxed maximum-height restrictions, and relaxed density restrictions on residential construction, or a combination of any of these three zoning reforms, affect the supply of multifamily houses and the cost of multifamily rents as well as house prices for single-family homes. In addition, it studies the effectiveness of inclusionary zoning policies in overcoming restrictive zoning. Specifically, it examines Massachusetts's Comprehensive Permit Act, often referred to as Chapter 40B. The Comprehensive Permit Act enables developers to appeal aspects of local zoning laws that limit housing construction in some capacity. This analysis helps us understand whether inclusionary zoning policies such as Chapter 40B are substitutes for relaxing land regulations in order to increase housing affordability. This report also examines how recent reforms to the state's Chapter 40A (the Zoning Act) requiring denser housing construction around public transit stops could affect the supply and price of housing in the immediate vicinity.

This report finds that density restrictions play a key role in limiting the multifamily housing supply. Relaxing density restrictions, either alone or in combination with relaxing maximum-height restrictions and allowing multifamily housing, is the most fruitful policy reform for increasing supply and reducing multifamily rents. Adopting multifamily zoning or relaxing height regulations does not yield the same increase in multifamily units built or reduce rents unless either is combined with relaxing density restrictions. Furthermore, Chapter 40B rarely substitutes for relaxing zoning regulations, particularly restrictions on multifamily housing. However, the law does complement relaxed zoning regulations by allowing developers to build more units than they could otherwise. Relaxing zoning regulations around public transit stops as required by recent reforms to Chapter 40A could result in greater housing supply and lower housing costs. The effects likely would be smaller in large municipalities and those closer to the city of Boston, which already have denser housing construction.