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From 1992 to 2006, the price of houses in the United States nearly tripled, primarily because increasingly stringent, local government land-use controls hampered the construction of urban housing. A full accounting of the U.S. mortgage crisis must recognize the role these restrictions played in distorting the market for subprime loans. Adapted from the source document.

A case study of land-use controls in Chicago is presented to argue that local governments have usurped control over private urban real estate. The problem has been exacerbated by courts that have given governments almost unlimited power to seize & regulate private property & by urban planners who do not understand how competitive markets function. The common belief that government intervention is justified because private markets are unable to achieve equilibrium is unmerited. An overview of the progression of land-use controls in Chicago from the first comprehensive zoning law enacted in 1923 to the present highlights the impact of planned development; the list of purposes of zoning ordinances; & the courts' refusal to interfere if the government claims restriction is needed. Chicago's focus on density limitation has resulted in an increase in housing costs, a decrease in minority & low-income populations in the most desirable areas, & excessive suburbanization (urban sprawl). Suggestions are offered for ways to reduce the trend toward greater land-use controls. References. J. Lindroth