The Hidden Planning Loophole Adding Hundreds of Thousands to City Housing

Rising housing prices are squeezing residents across North America, prompting many to point to limited land, soaring construction expenses, or speculative investors as the primary culprits. New research suggests that the way municipalities manage development approvals may be a hidden driver of the affordability gap.

Planning rules may be inflating costs, a Syracuse scholar argues

Associate teaching professor Austin Zwick, who leads the policy studies program at Syracuse University’s College of Professional Studies and the Maxwell School, investigates the impact of discretionary approval systems on housing supply. His findings appear in the journal Urban Governance.

In a discretionary framework, developers must satisfy all code requirements, yet final approval hinges on negotiations with planners, elected officials, and sometimes community groups. Zwick contrasts this with a “by‑right” approach, where meeting a checklist of municipal standards secures approval without additional procedural hurdles.

Flexibility or friction?

“In theory, discretion is meant to allow flexibility and responsiveness,” Zwick explains. While the intent is to extract public benefits—such as amenities or affordable‑housing units—from private projects, the reality often favors developers with deep pockets and political connections. These firms can weather protracted negotiations and shift added costs onto buyers, whereas smaller builders lack the resources to endure the same process. The outcome, Zwick says, is a market dominated by luxury projects rather than homes for ordinary households.

Vancouver case illustrates costly delays

One illustrative example from the study involves a stalled condominium project in Vancouver, British Columbia. Extensive public hearings, political approvals, and extended negotiations inflated per‑unit costs by several hundred thousand dollars before construction even began.

Streamlining approvals could ease the crisis

Zwick argues that solving the housing shortage does not solely depend on federal funding or sweeping legislative reforms. Instead, local authorities could mitigate price pressures by simplifying their approval processes, adopting clearer “by‑right” criteria, and reducing the discretionary leeway that currently slows development.