How Smart Is “Smart Growth?
Simply put, as home prices in these regulated communities rise much faster than incomes, prospective homeowners are compelled to take on greater volumes of debt in order to buy a house. At the same time, many existing homeowners, seduced by the easy credit available to convert equity appreciation into cash, took on debt burdens that were beyond their capacity to service. This land use regulation problem is a relatively recent phenomenon. Over the past few decades, a growing number of states and communities have adopted so-called “smart growth strategies that discouraged new construction and population growth by using restrictive zoning and tax policies to limit the amount of land available for development. In recent years the regulatory mechanisms that have been used in this effort include growth boundaries, minimum lot sizes, land set asides, impact fees, mandatory amenities, and building moratoriums. Since all of these initiatives serve to increase the cost of housing, these communit
