Study Shows Zoning Changes in Four US Cities Including New Rochelle Curtail Rent Growth, Save Tenants Thousands

Written By: Robert Cox

PHILADELPHIA, PA (May 11, 2023) — Pew Charitable Trusts has release a study on how zoning rules can reduce the growth in rental property pricing.

New Rochelle is among four jurisdictions across the United States that have successfully curtailed rent growth by introducing zoning rules to allow more housing. A national housing shortage has driven up rents, causing a record number of Americans to spend more than 30% of their income on rent. This leaves them “rent-burdened.” Higher rents contribute to inflation, which is reflected in the inflation index, where housing costs make up one third of it. More states, cities, and towns have reformed their zoning rules to allow more housing, including New Rochelle, Minneapolis, Portland, and Tysons, Virginia. The Pew Charitable Trusts examined the changes in these four jurisdictions as they have received attention for revising their formerly restrictive zoning codes.

Adding new housing supply slows rent growth, according to studies. This slows displacement pressures and reduces competition among tenants for each available home. In all four places examined, the vast majority of new housing has been market rate, meaning rents are based on factors such as demand and prevailing construction and operating costs. While most rental homes do not receive government subsidies, adding more housing of any kind helps slow rent growth.

New Rochelle shows further evidence that new housing stemming from zoning changes has caused the slowdown in rent growth. The housing boom in this Westchester County city did not begin until 2020, later than the other jurisdictions. New Rochelle permitted an average of 37 new homes per year in 2017 and 2018, but because it had rezoned a downtown area near its train station to allow apartments, the annual permit average jumped to 989 for 2019 to 2021. Rents in New Rochelle rose 12% from January 2017 to January 2020, and then declined 5% from January 2020 to February 2023 as new homes became available.

Although rents remain high in the four places examined, they are lower than they would be if the cities had not allowed more housing. To solve regional housing affordability, states will likely need to act to ensure that restrictive local zoning does not make housing unaffordable.

EDITOR’S NOTE: This article was generated by ChatGPT based on a study by Pew Charitable Trusts.