Housing prices are rising sharply in many cities worldwide. Given the scarcity of vacant lots in urban areas, solutions to rising prices must involve increased housing density. However, over the past century, local governments have implemented myriad zoning regulations that limit new construction. These restrictions have increased housing costs, impairing aggregate output, geographic mobility, and wealth accumulation for younger households. Since 2016, at least 54 municipal, state, and national governments worldwide have relaxed one or more zoning regulations in an effort to reduce housing prices.

Our research examines how zoning regulations in the Boston metropolitan area of Massachusetts have affected the long-run supply, prices, and rents of single-family and multifamily homes (apartments). We focused on the three major types of residential zoning regulations implemented in most cities worldwide: multifamily zoning restrictions (which dictate whether apartments can be built), height restrictions, and density restrictions (such as maximum units per lot, minimum lot sizes, and setback requirements).

We used lot-level zoning data from 2010, covering 86 municipalities in the Boston metro area, to compare lots within 0.2 miles on either side of zoning boundaries. This methodology is beneficial because it allows us to compare similar houses that differ primarily due to zoning regulations, thereby revealing the impact of zoning regulations on housing characteristics and prices. The challenge with this methodology, however, is that many zoning boundaries align with natural features, as well as municipal and school district boundaries. This can lead to variations in land and neighborhood characteristics on either side of a boundary for reasons unrelated to zoning, potentially biasing our findings. To mitigate this, we analyzed only zoning boundaries that do not overlap with natural features or other administrative boundaries. Additionally, we focused solely on straight boundary segments to account for the possibility that some boundaries were drawn to coincide with existing infrastructure. We confirmed that land and neighborhood characteristics did not vary on either side of the boundaries we studied.

Our findings reveal that loose density restrictions paired with multifamily zoning in the same neighborhood increased the average number of housing units per lot by 62 percent. Conversely, strict density regulations increased lot sizes, living space, and the number of bedrooms and bathrooms per housing unit. Monthly multifamily rents were, on average, 4.2 percent ($54) lower on the side of a boundary with looser density regulations. Moreover, these rents were 6.9 percent ($101) lower when height restrictions were also more lenient. Looser density regulations reduced single-family home sale prices by 4.4 percent ($28,488) and by 2.2 percent ($13,394) when paired with multifamily zoning. By contrast, looser height restrictions did not affect housing supply or prices, even when paired with multifamily zoning. These findings suggest that density restrictions limit housing construction in the Boston metro area while height regulations do not. It is important to note that in other cities, different regulations might prove to be the most restrictive. Since we examined the effects of regulations imposed in the early to mid-20th century, our findings are best interpreted as long-run differences across zoning boundaries.

Our research also finds that differences in housing prices and rents across boundaries primarily stemmed from strict zoning regulations increasing the average size of housing units. We calculated that 58 percent of the land in the Boston metro area is limited to single-family homes, 70 percent is subject to a 35-foot height limit, and 25 percent is limited to one housing unit per acre. Therefore, our findings suggest that zoning regulations have increased the size of housing units and driven up prices in large portions of the Boston metro area.

We also simulated the long-run effects of a 2021 Massachusetts reform that relaxed zoning regulations by requiring municipalities to allow multifamily housing and 15 housing units per acre within 0.5 miles of train stations. Our estimates suggest that this reform will reduce the median monthly multifamily rent by 4.9 percent ($88) over the next 60 years, primarily in suburban municipalities. Median sale prices of single-family homes could fall by 8.5 percent ($131,617) near train stations in areas with highly restrictive zoning, such as suburban municipalities. However, sale prices could increase by 1.2 percent ($5,735) near train stations closer to central Boston, where housing density regulations are already looser, possibly because the reform will increase housing demand and lot prices in these areas.

Note
This research brief is based on Amrita Kulka et al., “Under the (Neighbor)Hood: Understanding Interactions Among Zoning Regulations,” Review of Economics and Statistics, ahead of print, March 24, 2026.