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Housing costs are pricing many people out of city living, as demand outstrips supply in areas where there is limited or no new land to release for construction. A new study examines zoning laws in Greater Boston, USA, to better understand what local authorities can do to help.

Since vacant land is scarce in built-up cities and towns and they can鈥檛 create new land, local governments must explore other options to tackle this problem.

One approach is to review the zoning regulations which place barriers in the way of building more densely in cities – but until now, the impact of zoning regulations has typically been studied one at a time and there has been limited evidence on which combination of reforms have the biggest effect on supply and affordability.

For example, allowing apartment buildings in certain areas (a popular current policy suggestion) can not achieve much as long as height and density restrictions limit the number of units and floors that can be built.

In their recent paper – , published in the , Dr Amrita Kulka and her co-authors present the first evaluation of how zoning restrictions combine to impact supply, prices and rents of homes and apartments.

鈥淏eing unable to afford a home that meets your needs isn鈥檛 just a private problem,鈥� Dr Kulka explains. 鈥淚t hurts the regional and national economy if people can鈥檛 live near the jobs they could do best, it stops young people from building savings and equity in their homes, and prevents people from moving to access better jobs or schools.鈥�

鈥淲e found 54 state and local governments around the world which have relaxed one or more zoning regulations in an attempt to increase affordability in their areas – but there is limited evidence on what options work best.

鈥淥ur work is the first to create a framework to study how zoning regulations interact and which combination of reforms have the greatest effect on housing supply and affordability.鈥�

The research team chose the three most typical zoning regulations in US cities for the study – regulations which limit construction to single-family homes; maximum height restrictions; and density restrictions – such as rules on how large lot sizes must be, how far houses must be set back from the road, and maximum numbers of units per development.

To simulate the effect of relaxing regulations, or upzoning, the team identified zoning boundaries which ran within Greater Boston municipalities, rather than exploring differences across local government boundaries where other factors might come into play.

The 26,078 zoning boundaries across which at least one type of zoning restriction differs were carefully sifted to remove any boundaries where price and density might be affected by other factors such as access to high-quality schools or other amenities. This left 2,835 boundaries to analyse.

Using lot-level zoning data and housing data from property tax records, the team tested how the different zoning rules each side of the border influenced housing supply, housing type, housing characteristics, land values, and prices or rents per unit.

To increase housing supply, the key combination of regulations proved to be density and height restrictions – areas where both of these regulations were more relaxed had up to 85 per cent more housing units per lot than those where the rules were strict, but with no effect of housing prices. Where density rules alone were relaxed, supply increased by only 7 per cent, while loose height restrictions alone had almost no effect.

To tackle affordability, the key regulations in Greater Boston were density, alone or in combination with relaxation of the other regulations. Where density rules were less strict, prices for single-family homes were around 4.4% lower than the other side of the boundary. Rents were also lower. Allowing more density along with allowing flats increased units per lot by 62 per cent and also increased affordability.

Dr Kulka attributes this in part to the way restrictive zoning regulations influence the composition of a neighbourhood鈥檚 housing mix.

鈥淩estrictive zoning regulations push developers towards larger family houses and rental units with more floorspace and rooms, which command higher prices. This means that some households, who would prefer living in a smaller unit, have to overconsume housing, making it harder to live in certain attractive neighborhoods and leaving less disposable income for spending on non-housing items.鈥�

The researchers applied their model to simulate the long-term effects of reforms in Massachusetts. In 2021 the city passed a reform which required municipal authorities to permit multi-family housing and increased density near public transit stops. The simulation found that such small-scale upzoning policies can be an effective way to increase supply and reduce prices, particularly in neighborhoods surrounding train stations in suburban municipalities.

Dr Kulka said:

鈥淥ur Greater Boston evidence shows that the most effective way to increase supply and lower prices is to relax density restrictions while allowing the construction of multi-family homes. In other cities and countries, different regulations might be the most restrictive.

鈥淔or example, there is evidence of height restrictions being particularly burdensome in Japan. On the other hand, under a non-zoned planning system in the UK, local governments make it difficult to densify areas by designating sites for new residential development that are often on the fringes of cities and towns.

鈥淥ur methodology can be applied to any zoning-based system, offering a robust way to identify which combination of regulations policymakers should focus on if they want to increase housing availability and affordability in their city centres.鈥�

• Amrita Kulka, Aradhya Sood, and Nicholas Chiumenti; Under the (Neighbor)Hood: Understanding Interactions Among Zoning Regulations. The Review of Economics and Statistics 2026; doi: