NCPA - National Center for Policy Analysis


November 14, 2007

Florida is recognized as a national leader in the "Smart Growth" movement.  The state has given housing goals a special prominence in regional and urban planning, explicitly requiring its cities to plan for a diverse range of housing needs and types.  However, a growing body of research strongly suggests that some of the goals of Smart Growth's advocates may be inconsistent with the realities of housing development, says the James Madison Institute.

For example:

  • To the extent that more compact, higher density urban development is encouraged through growth-management laws such as Florida's, higher housing prices could result.
  • In fact, despite statewide planning goals and programs designed to promote affordable housing, housing costs have been increasing in Florida faster than the national average.
  • According to the National Association of Realtors, home prices in Florida exceeded the national average for the first time in 2005.

Since 1994, housing price inflation has outstripped income growth by a factor of two to one.  Not surprisingly, housing affordability has suffered.  Despite these trends, few analysts have examined Florida's statewide growth management law and its impact on housing markets and prices:

  • According to a 2001 Reason Foundation study, Florida's Growth Management Act (GMA) may have contributed as much as 20 percent to rising housing costs between 1994 and 2000. 
  • A statistical analysis of housing trends in the 56 of Florida's 67 counties found that between 1990 and 2006, as much as 16 percent of housing price inflation can be attributed to planning under the state's GMA.

Source: Leonard C. Gilroy, Samuel R. Staley and Sara Stedron, "Statewide Growth Management and Housing Affordability in Florida," James Madison Institute, Backgrounder No. 53, October 2007.


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