Constraints on Housing Supply: Natural and Regulatory
AbstractTwo empirical papers study US housing markets and treat the impacts of both natural geographic constraints, such as water bodies and steep slopes, and regulatory restrictions. Albert Saiz (2010) concentrates on identifying the impact of natural geographic constraints. Saiz creates measures of developable land using an invariant 50-kilometer radius about an urban focal point. I criticize SaizÃ¢â¬â¢s geographical constraint on the basis that its invariant radius renders comparisons between urban areas of differing sizes of questionable value. Moreover, the inter-relation between the two kinds of constraints—the natural and the regulatory—is highly particular to the locale; for example, the effect of a natural geographical constraint would be neutralized by an interior regulatory constraint such as an urban growth boundary. Haifang Huang and Yao Tang (2010) concentrate on the impact of regulatory constraints on booms and busts in local housing markets, but they also make use of the natural-constraint data furnished by Saiz. Both studies also use the Wharton Land Use Regulatory Index, about which I raise a number of questions. I believe that the procedures employed by the two papers have the tendency to understate, at the aggregate level, the pernicious impact of regulatory restrictions.
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Bibliographic InfoArticle provided by Econ Journal Watch in its journal Econ Journal Watch.
Volume (Year): 8 (2011)
Issue (Month): 1 (January)
Land use regulation; Wharton Land Use Regulatory Index; urban growth boundary; Portland; smart growth; housing bubble; housing affordability;
Find related papers by JEL classification:
- R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
- R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
- R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Huang, Haifang & Tang, Yao, 2010.
"Residential Land Use Regulation and the US Housing Price Cycle Between 2000 and 2009,"
2010-11, University of Alberta, Department of Economics, revised 01 Nov 2010.
- Huang, Haifang & Tang, Yao, 2012. "Residential land use regulation and the US housing price cycle between 2000 and 2009," Journal of Urban Economics, Elsevier, vol. 71(1), pages 93-99.
- Albert Saiz, 2010. "The Geographic Determinants of Housing Supply," The Quarterly Journal of Economics, MIT Press, vol. 125(3), pages 1253-1296, August.
- Anundsen, André Kallåk & Heebøll, Christian, 2013. "Supply Restrictions, Subprime Lending and Regional US Housing Prices," Memorandum 04/2013, Oslo University, Department of Economics.
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