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The Cost of Good Intentions: How Government Regulation Impedes Housing Construction in New York City

Tuesday June 2002


Professor Michael Schill Director, Furman Center for Real Estate & Urban Policy, New York University

New York City has not produced enough new housing to meet demand since Duke Ellington took the A train. Many experts have offered reasons for this deficiency: rent control, shrinking availability of virgin land, and insufficient government investment are three of the most popular explanations. But few experts have looked at the many ways housing production is affected by government laws and regulations, both state and local, that have made development harder and costlier.

Professor Michael Schill, Director of the Furman Center for Real Estate and Urban Policy at New York University, has explored this question and found that New York’s restrictions on building significantly increase the cost of housing construction in the City, thereby distorting the housing market. His book, Reducing the Cost of New Housing Construction in New York City, (with Jerry Salama and Martha Stark) systematically examined the myriad ways government interference adds time and cost to every proposed development. His talk will highlight some of the most important of these barriers to building, such as overly restrictive zoning and building codes, and inefficient permit and land use procedures, and provide a blueprint for government action if we really want to make housing plentiful and affordable.

This presentation is the third of an ongoing series as part of the Institute's Barriers to Building project. The project examines how local and state government policies can be reformed to increase the quantity and quality of housing in New York City.