Research

Do Minimum-Lot-Size Regulations Limit Housing Supply in Texas?

Why do so many subdivisions feature rows of similar houses on identical lots? Real estate developers are often held responsible for the bland pattern of land use in suburban Texas and around the country. But it is often local land use regulations, rather than developers or home buyers, that deserve much of the blame. So argue M. Nolan Gray and Salim Furth in “Do Minimum-Lot-Size Regulations Limit Housing Supply in Texas?”

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Even in otherwise lightly regulated, pro-growth suburbs, minimum lot sizes prevent developers from mixing large and small lots together, even though consumers may demand a wide variety of lot sizes. Minimum lot sizes also decrease population densities and increase housing costs. With less restrictive minimum-lot-size rules, there would be more variety at the affordable end of the new-house market.

Liberalizing Land Use Regulations: The Case of Houston

There is substantial agreement in the literature that restrictive local land use regulations, such as zoning and subdivision regulations, are a major driver of housing costs, to the extent that they limit the quantity of new housing developed and raise construction costs. Reducing regulations that inhibit new construction would make housing more affordable, but often a powerful constituency of local homeowners opposes building new housing, as new housing is often seen as a threat to property values. Simultaneously, urban renters might have antidevelopment attitudes tied to fears of gentrification. State and local leaders face a tricky political minefield on the road to affordability.

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Sweeping subdivision regulation reform in Houston, Texas, provides an instructive alternative to what can often seem like a no-win scenario for local planners. The circumstances surrounding the city’s 1998 reduction of minimum lot sizes for single-family homes hold two key lessons for policymakers: First, allowing homeowners who are strongly opposed to reform to opt out of a reform’s effects can effectively negate local opposition to citywide reform. Second, postreform redevelopment following a citywide reform is likely to occur mostly in middle-income residential neighborhoods and underutilized former industrial and commercial areas, not the marginalized residential communities that urban renters are concerned about. This policy brief outlines what researchers know about minimum-lot-size regulation, sketches out Houston’s unique system of urban land use regulation, and draws lessons from Houston’s successful experience with subdivision liberalization.