"Strict zoning laws provide stability in a volatile market space"

[Austin Wolff]

After I posted the image above on LinkedIn and mentioned how zoning strictness doesn't affect price growth as much as people think, a "Planner" (pro-zoning) commented:

"Enforcing strict zoning laws provides a level of predictability and stability in an otherwise speculative and volatile market space."

To which I provided the following data:

Compare Los Angeles with Houston, which has (practically) no zoning laws. If his statement is true, we should expect Los Angeles's home price volatility over a period of time to be less than Houston's.

So I took 25-year monthly data from Zillow for the Los Angeles MSA and Houston MSA, calculated the monthly change in price for every month (300 months), then calculated the standard deviation of price changes for both metros.

Los Angeles had a volatility of 4.07%
Houston had a volatility of 3.91%

There is practically no difference in volatility between Los Angeles, a market with tight zoning restrictions, and Houston, a market with (practically) no zoning restrictions. I'd say their comment (null hypothesis) is false.

Am I wrong here? 

[Bruce Woodruff]

Quote from @Austin Wolff:

Quote from @Bruce Woodruff:

I don't think you're necessarily 'wrong'.....but I don't think you can/should compare 2 cities that are so different in so many ways. Just the weather factor in LA will sway those stats hugely.....

However, I don't agree completely with the planner either. I beleive in some zoning....but, when applied strictly, it also creates a boring bland community or city. I've seen cities fight the 'mixed use' concept (Residential living above, commercial below), when in the right place it can make a city come alive....

IME, city planners are blah and boring with no imagination and a dislike of risk....

Oh man. Mixed use is such a wonderful concept. Should be implemented more across urban cities. 

 Implemented as in 'allowed', not as in 'forced'....