One thing that sees its fair share of news coverage is the status of housing prices in the United States. Since the recent economic crash in 2008, brought on by an imploding housing market, all eyes are on the industry and how its effects can spread. With rising housing prices and rents, cities are becoming less affordable, threatening to push out low- and middle-income Americans.

Now, a focus is on zoning policies that limit housing supply and lead to more affordable housing. While this all sounds good on paper, there still isn’t a complete understanding around risk. In fact, having more relaxed zoning could create even greater inequality in cities. Let’s look at some recent zoning trends in pricing and see how they can affect our lives down the road.

Gentrification

As mentioned above, it sounds great to loosen up zoning laws in order to lower the housing prices in a community. Recently, cities like Houston and Atlanta have seen have seen a lot of development in housing, attracting younger and more affluent crowds to settle into newer homes and townhouses in once poor neighborhoods. The fallout from that is while a newer community moves in because of lack of zoning restrictions, it’s pushing out the people who have been living in those areas for generations.

This problem has a name: gentrification. It’s a sensitive sociopolitical matter that has affected the economic standing of large swaths of populations.

Focusing on Other Areas

On the other hand, if a city loosens up its zoning laws or does away with them altogether, this can inspire developers to build in parts of town that will shut out certain social classes. Having an increased housing supply can send a message to the development community to build more housing options in the more desirable parts of town.

Housing is developed in areas of opportunity, but no matter where newer homes and townhouses and apartment blocks are built, some set of people find themselves on the outside.

Stagnating Prices

Less desirable neighborhoods will continue to see the description of “more affordable” slapped on them. Prices will stagnate or even decline in those areas while low and moderate income communities of the benefits that housing development brings. Relaxed zoning measures can lead to cities with more densely populated areas with affluent residents surrounded by less dense and rising impoverished communities.

The zoning trends of having more lax restrictions can have their benefits, but can also affect many neighborhoods and people in the wrong way. It’s a policy consideration for remaking growing cities, cities that are seeing inordinate growth. But there still has to be a moderation to the idea of creating a more relaxed zoning environment, and all public officials and municipalities should have a Municipal Liability insurance program.

About PGUI

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