Here's an interesting item about a drive in New York City to drop the minimum size requirements for apartments so that if people want to rent a very small one and someone thinks it'd be profitable to build one, they can.
Laws regulating the smallest permissable size of a dwelling—something like the rule against apartments smaller than 400 square feet in New York, or the very common rules in the suburbs mandating a minimum sized lot for a single-family home—are among the most straightword tools in the exclusionary zoning toolkit. The basic issue is that income-constrained individuals naturally make trade-offs among different virtues. You might get a larger dwelling with a longer commute. Or you might opt for a smaller dwelling with better local amenities. A rule against small homes prevents people with relatively modest incomes from making the trade-offs that would allow them to live in areas that the commute or the amenities makes desirable.
In the long term, there's really no reason to think large numbers of people in a wealthy society should be living in tiny micro-apartments. We have the technological capacity—via steel and elevators—to build an ample quantity of square feet for people to be able to afford decent-sized places in almost any neighborhood. But when we have quantitative legal caps on the size of structures, pairing them with legal minimums for the size of homes can be particularly punitive to low-income people.
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