Standard economic theory on subsidies and labor supply raises an unappetizing prospect - that housing assistance may have a negative impact on self-sufficiency. Because of the rent structure in the public housing and Housing Choice Voucher programs, participants may treat program benefits as a substitute form of income and this may dampen their ambitions to increase their own earnings.

According to a comprehensive literature review by Mark Shroder (2002), the evidence for these disincentive effects has been quite mixed. Moreover, the rigor and precision of various research efforts have been somewhat lacking. This study updates Shroder’s work by summarizing and critiquing a variety of recent additions to the literature on housing assistance and its effect upon residents’ progress toward self-sufficiency. These additions include five careful studies which have found that traditional assistance reduces employment and slows income growth. However, countervailing research continues to appear, suggesting that housing assistance, coupled with self- sufficiency programs, can have a positive effect on financial independence.

So while it may be said that the totality of the evidence in this area remains mixed, those believing that public housing and vouchers have neutral or even positive effects on work and earnings now face a more onerous burden of proof. Existing research on the work disincentives of housing assistance hypothesized in standard labor-supply theory cannot easily be ignored.

Much more encouraging are programs like Family Self Sufficiency and Jobs-Plus, which supplement housing assistance with a range of supportive services that promote self-sufficiency among recipients. If the disincentive hypothesis is in fact true, it now appears that well-designed enhancements to traditional housing assistance can counteract inherent negative employment and income effects.

Effective governance of residential development and housing markets poses difficult challenges for land regulators. In theory, excessive land restrictions limit the buildable supply, tilting construction toward lower densities and larger, more expensive homes. Often, local prerogative and regional need conflict, and policymakers must make tradeoffs carefully. When higher income incumbents control the political processes by which local planning and zoning decisions are made, regions can become less affordable as prices increase. Housing assistance programs meant to benefit lower income households could be frustrated by limits on density and other restrictions on the number and size of new units.

The empirical literature on the effects of regulation on housing prices varies widely in quality of research method and strength of result. A number of credible papers seem to bear out theoretical expectations. When local regulators effectively withdraw land from buildable supplies-whether under the rubric of "zoning," "growth management," or other regulation-the land factor and the finished product can become pricier. Caps on development, restrictive zoning limits on allowable densities, urban growth boundaries, and long permit-processing delays have all been associated with increased housing prices. The literature fails, however, to establish a strong, direct causal effect, if only because variations in both observed regulation and methodological precision frustrate sweeping generalizations. A substantial number of land use and growth control studies show little or no effect on price, implying that sometimes, local regulation is symbolic, ineffectual, or only weakly enforced.

The literature as a whole also fails to address key empirical challenges. First, most studies ignore the "endogeneity" of regulation and price (for example, a statistical association may show regulatory effect or may just show that wealthier, more expensive communities have stronger tastes for such regulation). Second, research tends not to recognize the complexity of local policymaking and regulatory behavior. For example, enactments promoting growth and development, often present in the same jurisdictions where zoning restrictions are observed, are rarely measured or analyzed. Third, regulatory surveys are administered sparsely and infrequently. Current studies are often forced to rely on outdated land use proxies and static observations of housing price movements. Fourth, few studies utilize sophisticated price indexes, such as those measuring repeat sales of individual properties. Such methods correct for well-known biases in price means and medians typically reported.

An agenda for future research in the area of regulatory effects on price should address these shortcomings and generate replicable findings relevant for policy reform efforts. Ideally, a national regulatory census would measure at regular intervals municipal enactments and implementation patterns. The most demanding aspect of this task is the development of standard regulatory indexes facilitating comparison at the municipal level and allowing for aggregation to the metropolitan and state levels. Over time, this survey should help describe changes in antecedent law and resulting land policy behavior so that time series encompassing regulation and price can be com_ piled. Existing building permit surveys can be adapted to facilitate this effort. Regular reporting from developers and builders regarding their experiences with local regulatory processes should then complement the census of laws and behaviors. An additional source of information would be a regularly refreshed, national land use survey, mapping in some detail the ever-changing patterns of residential and other development in metropolitan areas.

Early efforts to improve and expand research should focus primarily on the deliberate, painstaking development of better, more current data. When better data are available, the existing community of scholars will develop methods providing more reliable tests of hypotheses about the link between regulation and the well-being of housing consumers.

Land-use regulation is undertaken by units of local government and is notoriously hard to measure. This paper assembles and reports the results of five complementary and overlapping surveys of local regulation in the San Francisco Bay Area. We compile measures derived from surveys of public officials conducted in 1992 and 1998 and another completed in 2007. In addition, we survey the perceptions of regulation among developers and land-use intermediaries. A rich description and comparison of regulatory patterns is provided. The paper also investigates relationships among various measures of regulation and housing outcomes. We find, for example, that the entitlement process increases the cost of a new single family dwelling by almost $23,000 in the Bay Area. Moreover, the requirement of an additional review by governmental agents to gain approval of new developments is associated with a four-percent increase in the prices of existing owner-occupied housing.

Recent California legislation extends the application of prevailing wage regulations to subsidized low-income residential construction projects. This paper estimates the cost and supply effects of this legislation. Econometric evidence based on recently completed tax-credit projects in California demonstrates that construction costs increase substantially under prevailing wage requirements. Estimates of additional construction costs in our most extensive models range from 9 to 32 percent. The analysis controls for variations in cost by geographical location and for differences in project characteristics, financing, and developer attributes. We estimate the effect of uniform imposition of these regulations on the number of new dwellings for low-income households produced under the tax credit program. Under reasonable conditions, our mid-range estimate of this prospective decrease exceeds 2,600 units per year.

The article analyses the link between autarchic land-use policies adopted by local governments in California and the substantial redistribution of its population during the decade of the 1990s. Changes in population growth by racial and ethnic group in California cities are related to measures of the extent to which locally adopted policy favours expansion of the single-family housing stock. Controlling for the initial conditions of housing and labour markets by relying upon census measures for 1990, the paper accounts for the potential endogeneity of contemporaneous land-use policies by relying upon exogenous measures of the ‘exclusivity’ and ‘pro-growth’ propensities of the local public sector recorded by a state-wide survey in the early 1990s.

Numerous California cities and counties impose “below market rate” (BMR) inclusionary requirements on residential builders. The stated purpose of such ordinances is to increase the supply of affordable housing by adding price-restricted units to market-rate projects. This paper examines the effects of BMR requirements on residential development in weak real estate markets. We review relevant literature, conduct case studies of seven California communities, and interview California builders. Irrespective of boom or bust, there is no published evidence that California BMR requirements reduce total housing production, but the mix of housing may be affected, shifting the balance towards multifamily over single family housing in communities with such measures, the price level at the upper end of the market may increase, and price level and unit size at the low end may decrease. We find that the recent weakening of the housing market indeed places strain on many of the state’s BMR programs, as the price gap between market rate and income-restricted housing has narrowed and the sale of BMR homes, which carry resale restrictions, is more difficult. Builders express concern that aggressive BMR programs might slow recovery in the residential construction sector. As jurisdictions adjust to market realities, smart practices include (1) flexibility of BMR requirements in the face of weak demand and falling prices, in terms of number of units, affordability levels, or use and resale restrictions; (2) substitute compliance alternatives, such as off-site development and in-lieu payments; and (3) good faith negotiation among jurisdictions and builders, marked by cooperation and consideration of macroeconomic circumstances.