In Vancouver, British Columbia, a developer waited through lengthy negotiations, public hearings, and political approvals for a single condo project—and before construction even broke ground, the approval process alone had added hundreds of thousands of dollars per unit to the final cost. That stalled development exemplifies what Austin Zwick, an associate teaching professor at Syracuse University's College of Professional Studies and Maxwell School, calls ground-zero of North America's housing crisis: not land scarcity or construction costs, but the approval systems cities use to govern how housing gets built.
The housing affordability crisis gripping major North American cities has many culprits. Most people point to scarce land or rising construction expenses. But Zwick's research, published in March in the journal Urban Governance, identifies a less visible yet equally powerful factor: planning processes themselves. The real problem is how municipalities approve development—and it's something cities can actually fix.
Most expensive North American cities don't operate with strict, objective building codes. Instead, they use what Zwick calls "de facto discretionary approval systems." The gap between what the written code allows and how development actually works is enormous. Developers must meet all code requirements, but approval also depends on back-and-forth negotiations with regulatory bodies and case-by-case judgments from planners, elected officials, and sometimes organized community groups. Every project becomes its own negotiation rather than a straightforward process.
In contrast, "by-right" systems allow developers to get approval automatically as long as they meet or check every box on a municipality's written requirements—no negotiation needed. In theory, discretion sounds reasonable. Negotiations with developers are meant to ensure better outcomes, extracting public amenities and social housing units that wouldn't otherwise get built. But in practice, something very different happens.
Only large-scale developers with substantial time, money, and political access can survive prolonged negotiations. They absorb the costs and delays, then pass those expenses directly onto buyers. Smaller builders can't endure the process. The result is predictable: only large-scale luxury development gets built, not regular housing for regular people. The very mechanism intended to create better public outcomes instead eliminates competition and concentrates housing development in the hands of the largest firms.
Zwick emphasizes that the housing crisis is fundamentally a supply problem—demand outpaces what cities allow to be built. The planning rules in the most expensive cities aren't strict constraints; they're negotiation starting points. That distinction matters enormously because it points to a solution local governments control. Cities don't need to wait for federal or state funding to fix the problem, though that help would obviously welcome. They need to streamline their own approval processes.
Urban planning codes and processes determine what can be built, where, and how quickly. When those codes require lengthy negotiations, multiple public hearings, and political approvals for even routine projects, they slow housing production and drive up developer costs—costs that eventually land squarely on renters and buyers. Over time, procedural barriers translate into housing scarcity, which raises prices further, compounding the affordability problem. The burden cascades downward to the people who can least afford it.
Research shows that regulatory procedures impose substantial costs on housing production, often far more than marginal increases in land scarcity or construction materials. The fix isn't revolutionary. It's allowing cities to replace discretionary systems with predictable, objective approval standards. Free the market from negotiation gridlock, and supply can actually respond to demand.