A study recently published in the Housing Policy Debate found that communities that zoned too strictly for the development of large, single-family homes are at greater risk for foreclosure versus areas that accommodate a wider range of housing options.
Arnab Chakraborty, a professor of urban and regional planning at the University of Illinois, remarked, "If you push too much housing in the high-price sector, then people who would otherwise buy cheaper housing would either be forced to buy more expensive housing or move elsewhere."
Chakraborty and a couple of doctoral students focused on mortgages that entered the foreclosure process during the housing bubble, from 2005 through 2008. They used data from a half a dozen U.S. metro areas: Baltimore-Washington, D.C.; Boston; Miami; Minneapolis-St. Paul; Portland, Ore.; and Sacramento. These markets included 129 municipalities and many different zoning types. The researchers created four broad zoning classifications based on the maximum number of households permitted per acre, ranging from a high of more than eight units per acre down to fewer than one unit per acre.
What they discovered, according to Chakraborty, was that "the higher the proportion of single-family detached housing, the more mortgages are entering foreclosure." Thanks to a grant from the National Science Foundation, the team is expanding the research to include 20 more metro areas. Moving forward, municipal governments might use the findings to support development plans that offer a wider array of housing choices.
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