Rising home prices in Massachusetts have been fueled by restrictive land-use regulations in cities and towns, according to a new report.
The report, which was released last Thursday by the Pioneer Institute and Harvard University’s Rappaport Institute for Greater Boston, shows that zoning laws and excessive wetlands and septic system rules in 187 cities and towns surrounding Boston have made it more difficult for housing development to occur.
The study backs what homebuilders and developers have said for years: inconsistent, confusing and unpredictable regulations in cities and towns across the state have helped blocked housing production and drive up home prices.
James Stergios, executive director of the Pioneer Institute, said the study goes beyond presenting anecdotal evidence to demonstrate what type of impact zoning rules and other types of regulations are having in the state.
“The big, big story is that minimal-lot size [zoning] is really hurting development,” Stergios said.
When communities change their zoning to require two-acre minimum lot sizes instead of one-acre minimum lot sizes, they reduce the number of building permits that are issued by 36 percent to 40 percent, said Stergios.
Some 84,100 permits were issued during the 1990s in the Boston metropolitan area, compared to 141,347 in the 1980s, and 172,459 in the 1960s.
The reduction in permits caused by regulations has affected regional housing prices. Increasing the minimum-lot size by an acre can raise home prices between 11.5 percent and 13.8 percent, according to the report.
‘We Can Do Better’
Lot sizes for single-family homes have decreased nationwide since 1987 to an average of 15,788 square feet, but lot sizes in the Bay State have been getting larger.
Half of the communities that were studied zone more than half of their land area for at least one-acre lot sizes, and 27 communities required minimum lot sizes of at least one acre on more than 90 percent of their land.
Meanwhile, 14 communities required minimum lot sizes of two acres on more than 90 percent of their land area.
“It’s absurd that we have lot sizes of two acres, when the national average is under 15,000 square feet, and the average lot size nationally has declined over the last 20 years,” said Mark H. Leff, senior vice president of Salem Five Bank. “We can do better and it’s our hope that now that we have real data the policymakers can focus on these important problems.”
Leff, who serves as senior vice president for the Home Builders Association of Massachusetts – one of the study funders – said that the data collected clearly show that “the way we utilize land in this state is environmentally harmful.”
“I believe as result of this groundbreaking research finally folks should be able to come together to talk about resolving the housing problem but doing it in such a way as to protect the environment as well,” he said.
The study also examines how local wetlands and septic system regulations have restricted housing development.
Of the cities and towns studied, 131 had adopted local wetlands standards that were stricter than the state’s. When cities and towns impose stricter wetlands regulations than those of the state, new construction falls by about 10 percent.
Stergios said a database compiled by researchers, which is available on the Pioneer Institute’s Web site, shows that the number of local regulations and different definitions of wetlands makes it extremely difficult for developers trying to construct housing in eastern Massachusetts.
Kristina Egan, director of the Smart Growth Alliance, said her group agrees with the study’s conclusion that “large-lot zoning is really hampering housing production.”
But Egan said the state must focus on zoning reform that discourages sprawling development and ensuring that the environment isn’t sacrificed for housing development.
“We think there should be a lot more housing produced in the commonwealth but it should be in places that are served by infrastructure,” she said.
Egan also said she hopes the study findings aren’t used to weaken local regulations that are designed to protect the environment.
“We thinking statewide laws should serve as the floor for environmental protection and that regulations should be based on the local ecology,” she said.
Groups like the Massachusetts Association of Realtors and organizations representing homebuilders long have argued that cities and towns have used local septic system and wetlands regulations to block housing development.
Both the Realtors and homebuilders’ groups have lobbied for legislation to set uniform statewide Title 5 septic system and wetland codes. Currently, cities and towns can adopt septic system regulations that exceed state standards without having to provide any scientific proof about why they are needed, according to the industry groups.
The groups also have supported legislation that would allow local conservation commissions to administer and enforce locally adopted wetlands ordinances only if they are designed to protect unique resources.
“There have to be rules and regulations to protect the environment and welfare and safety of the public. But when public health rules and environmental rules are used as growth-control measures, that’s not good,” said David Wluka, a real estate development in Sharon who is president of the Massachusetts Association of Realtors, which also funded the Pioneer Institute study.
Homebuilders and Realtors have advocated cluster zoning, which gives builders the ability to group homes on smaller parcels while preserving any remaining land as conservation or open space. Some communities allow for cluster-style development through special permitting but at least one city, Gloucester, allows cluster development by right.
Communities that utilized cluster development zoning increased housing production by 8 percent to 20 percent, according to the study.
“The problem is that 80 percent of the 187 communities have cluster development provisions on the books but very few use them,” said the Pioneer Institute’s Stergios.
Cities and towns frequently resist housing development because of the extra costs associated with it – including additional school costs. Some communities seek commercial and industrial development instead as a way to boost property tax revenue without the added fiscal burden, explained Egan.
“Until we start to change the way municipalities are funded, we are going to continue to find municipalities putting up barriers to housing,” she said.
To boost housing production, the study’s authors recommend that the state reward communities that embrace new-home construction with more local aid, and give state entities the power to override local regulations in communities where little housing has been built.
They also recommend making it more difficult for opponents of residential projects to file lawsuits against developers and replacing existing local regulations with impact fees that developers would have to pay.
