Since 1950, housing prices have risen regularly by almost two percent per year. Between 1950 and 1970, this increase reflects rising housing quality and construction costs. Since 1970, this increase reflects the increasing difficulty of obtaining regulatory approval for building new homes. In this paper, we present a simple model of regulatory approval that suggests a number of explanations for this change including changing judicial tastes, decreasing ability to bribe regulators, rising incomes and greater tastes for amenities, and improvements in the ability of homeowners to organize and influence local decisions. Our preliminary evidence suggests that there was a significant increase in the ability of local residents to block new projects and a change of cities from urban growth machines to homeowners' cooperatives.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
11129.
Length: Date of creation: Feb 2005 Date of revision: Handle: RePEc:nbr:nberwo:11129
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Edward L. Glaeser & Joseph Gyourko & Raven Saks, 2005.
"Why Have Housing Prices Gone Up?,"
NBER Working Papers
11129, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
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Cited by: (explanations, 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.)
Edward L. Glaeser & Joseph Gyourko, 2006.
"Housing Dynamics,"
NBER Working Papers
12787, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Joseph Gyourko & Christopher Mayer & Todd Sinai, 2006.
"Superstar Cities,"
NBER Working Papers
12355, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)