"Enlightening Ideas for Public Policy..."
Vol. 8, Issue 23; June 5, 2006



Urban-growth boundaries, purchases of regional parks and open spaces, and various limits on building permits are supposed to make a region more livable. In reality, these and similar land-use policies have created artificial land shortages that have sent housing prices to extreme highs, lengthened commute times, and hindered small businesses, according to Independent Institute Research Fellow Randal O'Toole.

In the San Francisco Bay Area, for example, a median-income family "could dedicated a quarter of their income on housing and pay off its mortgage on a median-priced home in just 13 years," writes O'Toole in an op-ed for the SAN FRANCISCO CHRONICLE. Over the years more land-use policies were implemented. "By 1980, a family had to spend 40 percent of their income to pay off a home mortgage in 30 years; today, it requires 50 percent."

O'Toole also notes that measures to protect the Bay Area's (marginal) farmlands have led to the reduction of more productive farmland in the Central Valley as more houses were built there for Bay Area workers. This has forced many commuters to live farther away from their jobs and worsened traffic congestion. By impeding home ownership, such policies have also stifled small-business formation: "Most small businesses get their original financing from a loan secured by the business owner's home," O'Toole writes. "Barriers to home ownership reduce this mobility and help keep low-income people poor."

See "The High Price of Land-Use Planning," by Randal O'Toole (SAN FRANCISCO CHRONICLE, 5/22/06)

"El alto precio de planificar el uso de la tierra"

This op-ed is based on "The Planning Penalty: How Smart Growth Makes Housing Unaffordable," by Randal O'Toole

For more on housing, see