Underdevelopment Despite Upzoning
It is commonly assumed that local land use regulations—and especially single-family and other restrictive zoning classifications—limit housing supply and thus increase housing costs. This view assumes that absent restrictive regulations, landowners will respond to rising prices by building more homes. This study of Charlottesville, Virginia—a small, high-demand city experiencing high housing costs—uncovers significant underdevelopment of parcels under current zoning classifications, however. Under the zoning code that governed local land use through 2023, Charlottesville’s residential districts could have accommodated significantly more housing units – production that went unused and remains untapped. That finding suggests that the conventional story about the effects of local land use regulations on landowner behavior is not straightforward, that zoning classifications may not be the primary constraint on housing supply, and that the elimination of restrictive zoning, absent other interventions, may have relatively small effects on housing supply and/or affordability in a given jurisdiction.