Andrew Cline is the president of the Josiah Bartlett Center for Public Policy.
Downtown Portsmouth, New Hampshire, is a picture-perfect postcard of a coastal New England town. Cobblestone and brick walkways carry pedestrians through dense neighborhoods dotted with colonial homes, preppy boutiques, seafood joints and music halls.
On some streets, front steps of weathered stone empty directly onto sidewalks, and clapboard buildings nestle up to each other, pressing residences next to offices next to shops. High-end hotels have popped up for wealthy tourists happy to pay a premium to stay in the heart of a beautiful colonial town.
It’s increasingly hard to buy a home if your income does not match or exceed those of the tourists. The median home price in Portsmouth is about $800,000, up more than 300 percent since 2000, according to Realtor.com. That’s a more than $400,000 premium after adjusting for inflation.
Demand for homes is high. One way to meet it would be to extend the popular mix of small homes and shops beyond the city centers of towns like Portsmouth. Developers are handcuffed, though, because in most places that would be illegal.
Portsmouth was settled in 1623, and it grew organically for three centuries. A vibrant community of small and large homes popped up around a commercial harbor. Then, in 1925, New Hampshire adopted its first zoning law.
Over the next century, local officials severely restricted the expansion of traditional New England villages. The tidy municipalities of the future, centrally planned for the automobile age and for large houses, took their place.
Zoning has its legal roots in municipal police power, and localities initially justified it on public health and safety grounds — such as separating industry from residential areas, or flammable buildings from each other. Minimum lot sizes, though, serve no legitimate health or safety purpose. They were implemented in response to fears that young, growing families in search of starter homes would pay insufficient property taxes relative to their use of public services. Emerging in the aftermath of the Second Great Migration and school desegregation, minimum-lot-size rules slowed efforts to integrate cities and created income-restricted neighborhoods through government regulation.
Every New England state adopted a zoning law between 1920 and 1931. The classic New England town, immortalized in Currier and Ives paintings, was relegated to historical status.
After a century of adopting the same zoning ordinances as most other municipalities in America, New England’s towns and cities look much like those around the rest of the country, only with more maple trees.
This was not an unintended effect. But it came with numerous negative effects, some unintended, that policymakers and activists are struggling to fix. The most consequential was the de facto ban on starter homes.
Zoning ordinances typically mandate that homes are built on lots larger than a certain size, often 40,000 feet, called a “builder’s acre.” This is a nationwide problem, but New England showcases how these minimum lot sizes have changed communities and sent home prices surging.
In Massachusetts, “99% of land allowing single-family housing has a minimum lot size mandate,” according to the Massachusetts Zoning Atlas. “More than half of single-family land has at least a 40,000 square foot minimum.” In Connecticut, it’s 81 percent. In New Hampshire, 87 percent of buildable land requires a minimum lot size of at least an acre, according to the New Hampshire Zoning Atlas.
A 2011 study of minimum lot sizes in the Boston area found that they increase home prices by as much as 40 percent in the decade after their introduction.
The American Enterprise Institute’s Housing Center analyzed roughly 4.6 million homes built in new subdivisions in the United States from 2015 to 2024. Only 750,000 of those, or 16 percent, were starter homes, defined as homes that cost no more than four times the county’s median household income.
AEI’s researchers estimate that a minimum lot size of 1,000 square feet would have produced an 85 percent increase in new home construction from 2015-24, with approximately 2.4 million additional starter homes being built.
Developers would prefer to build more starter homes, and buyers would prefer to buy them. Minimum lot sizes reduce developers’ customer base by pricing a large chunk of would-be homeowners out of the market. Market research by the National Association of Home Builders finds that almost 40 percent of buyers are willing to give up land if that would get them into a home, and 35 percent say they’re willing to have a smaller house. The association advocates reducing minimum lot sizes as part of a package of reforms to make homes more affordable.
Portsmouth exemplifies how minimum lot sizes change communities. Its downtown is governed mostly by municipal zones written to preserve the character of an area built before zoning. In two of the core downtown zones, there are no minimum lot sizes.
Walking outward from the heart of downtown, homes with small yards appear. Walk farther, the yards get bigger. Radiating out from downtown are zones that require minimum residential lot sizes of 3,000 square feet, then 5,000 square feet, 7,500 square feet, 15,000 square feet, one acre and, finally, five acres in the “rural” zone.
The larger the minimum lot sizes, the less Portsmouth looks like a colonial town. Similar patterns repeat in town after town. Beautiful villages with small homes were outlawed throughout New England and the U.S., replaced by cul-de-sac developments that conformed to minimum-lot-size mandates.
Zoning has valid uses, but eliminating minimum lot sizes would allow builders to offer starter homes in many places where they are illegal. Legalize mixed-use developments, and charming places like Portsmouth could become the cities of the future instead of relics of the past.
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