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Scott Beyer

Scott Beyer

October 5, 2020

How Does Regulation Stop Density? Here's Three Ways.

Free stock photo of barcelona, city, density

What is America’s biggest domestic policy failure? There could be many answers, and they’d depend on the frame of reference of whom you had asked. For me, it’s a relatively-obscure one that has major consequences: land-use regulations blocking urban density.

That’s because urban density, by which I mean clusterings of people at a high rate, per acre, within taller buildings, is desirable.

Along with being a lifestyle preference for millions of Americans, urban living is better for the environment, can improve per-acre tax yield, and is more economically productive than other forms of habitation. Density creates scaling that leads to jobs, wealth, and innovation. For example, the New York City metro area has under 6% of the U.S. population but accounts for over 7% of national GDP. The numbers become even more skewed when comparing Manhattan, the city’s densest borough, with the rest of America.

The problem with anti-density regulations is they prevent more places from becoming like Manhattan. Cities as diverse as San Francisco, Denver, Chicago—and even other boroughs of New York City—have extreme demand pressures. There’s intense lobbying from developers to satisfy this demand by building towers, but regulations keep the cities low-slung. They avoid this type of efficient land use, and people must instead move to metros that have suboptimal, sprawling patterns. Here, I list three leading regulatory culprits for this: limitations on building height, floor-area ratio (FAR), and dwelling units per acre (DUA).

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