Recently, Stephen Smith highlighted the permissiveness of local land-use regulation in Japan, and particularly in Tokyo, where builders in the city’s 23 innermost wards began construction on almost 110,000 new housing units in 2012. By way of contrast, England, home to 53 million of Britain’s 23 million people, had a mere 115,000 housing starts that same year. The New York metropolitan area, with a population more than twice as high as inner Tokyo, issued a mere 27,000 housing units, and the number of housing starts was smaller still. While the Japanese economy is heavily-regulated in some domains, like retail and agriculture, it takes a laissez-faire approach to urban land use. Smith attributes Japan’s free urban housing markets to the fact that land use is regulated at the national level rather than the local level. “The general rule in land use politics,” according to Smith, “seems to be that the more local the level of decision-making, the less density is allowed.” In the U.S., where zoning is primarily a local responsibility, there is “a deep-seated antipathy toward density” while in Toronto, where urban land use is primarily controlled by the provincial government of Ontario, cities are under pressure to allow more growth in the center of town. One consequence of Tokyo’s bias in favor of building is that while rents in New York city have soared over the last decade, rents in Tokyo have actually fallen, albeit slightly, over the same interval.
Is there any American city that is getting housing right? Houston, a sprawling city that’s been getting denser as development restrictions limiting multi-unit apartment buildings have come crashing down, appears to be getting there.