Artificial Scarcity35 Sourced Claims, Contested Facts & Evidence

Topic summary

Local land-use restrictions, parking minimums, and discretionary approvals have systematically suppressed homebuilding for decades.

Key research questions

• Investigate "Why Is Housing So Expensive?" from this distinct point of divergence: Regulatory Supply Constraints.

Important claims and supporting citations

• According to Wharton index research, over 50% of highly regulated communities mandated a one-acre minimum lot size in at least one neighborhood, compared to under 5% of lightly regulated communities.

  • https://faculty.wharton.upenn.edu/wp-content/uploads/2017/05/Regulation-and-Housing-Supply-1.pdf
  • https://realestate.wharton.upenn.edu/working-papers/a-new-measure-of-the-local-regulatory-environment-for-housing-markets-the-wharton-residential-land-use-regulatory-index/

• State data presented to the California Assembly shows that housing projects of five or more units approved in 2023 took an average of 700 days from initial application to final permit approval (323 days to entitlement, 377 days to permit).

  • https://ahcd.assembly.ca.gov/system/files/2025-04/ahcd-04.30.25-hearing-packet.pdf

• According to the Wharton Residential Land Use Regulatory Index survey, permit approval for a standard housing project averaged 10.2 months in highly regulated communities compared to 3.2 months in lightly regulated communities.

  • https://faculty.wharton.upenn.edu/wp-content/uploads/2017/05/Regulation-and-Housing-Supply-1.pdf
  • https://realestate.wharton.upenn.edu/working-papers/a-new-measure-of-the-local-regulatory-environment-for-housing-markets-the-wharton-residential-land-use-regulatory-index/

• NYU Furman Center research found that single-family parcel conversions represented under 20% of Houston's post-reform townhouse developments, with most redevelopment occurring on larger urban-core parcels with older homes.

  • https://www.urban.org/urban-wire/chicago-new-apartment-buildings-typically-require-city-council-approval-which-may-delay
  • https://www.furmancenter.org/publication/here-come-the-tall-skinny-houses-assessing-single-family-to-townhouse-redevelopment-in-houston-2007-2020/

• Wharton index research revealed that land-use restrictiveness correlated positively with wealthier and more educated communities, but showed a weak, negative correlation with existing population density.

  • https://faculty.wharton.upenn.edu/wp-content/uploads/2017/05/Regulation-and-Housing-Supply-1.pdf
  • https://realestate.wharton.upenn.edu/working-papers/a-new-measure-of-the-local-regulatory-environment-for-housing-markets-the-wharton-residential-land-use-regulatory-index/

• San Francisco received permit applications for over 9,600 homes in 2025 but completed only about 2,700 units, falling far short of its annual state RHNA target of roughly 10,000 units.

  • https://www.city-journal.org/article/free-to-build

• The 2018 Wharton Residential Land Use Regulatory Index ranked the San Francisco and New York City CBSAs as the most regulated U.S. housing markets, both exceeding one standard deviation above the national average.

  • https://realestate.wharton.upenn.edu/working-papers/the-impact-of-local-residential-land-use-restrictions-on-land-values-across-and-within-single-family-housing-markets/
  • https://www.city-journal.org/article/free-to-build

• An analysis by the University of Denver and Rocky Mountain Land Use Institute estimated that eliminating parking minimums in Denver would increase housing construction by approximately 12.5 percent, or 460 homes annually.

  • https://www.city-journal.org/article/free-to-build