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The Incidence of the Land Use Regulatory Tax

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  • Ron Cheung
  • Keith Ihlanfeldt
  • Tom Mayock

Abstract

Land use regulation has been found to impose a substantial tax on housing within select U.S. metropolitan areas. In this article, we develop hypotheses regarding the incidence of this tax by income class and racial group within these areas. Parcel‐level data from Miami‐Dade County, Florida, are used to test our hypotheses. We find that, while the tax rises with a household's permanent income, this rise is less than proportional, making it a regressive tax. We also find, controlling for household permanent income, that the tax is a higher percentage of the price of homes located in black neighborhoods in comparison to those located in white or Hispanic neighborhoods.

Suggested Citation

  • Ron Cheung & Keith Ihlanfeldt & Tom Mayock, 2009. "The Incidence of the Land Use Regulatory Tax," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 37(4), pages 675-704, December.
  • Handle: RePEc:bla:reesec:v:37:y:2009:i:4:p:675-704
    DOI: 10.1111/j.1540-6229.2009.00260.x
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    File URL: https://doi.org/10.1111/j.1540-6229.2009.00260.x
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    References listed on IDEAS

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    1. Cheshire, Paul & Sheppard, Stephen, 2002. "The welfare economics of land use planning," Journal of Urban Economics, Elsevier, vol. 52(2), pages 242-269, September.
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    6. Mayer, Christopher J. & Somerville, C. Tsuriel, 2000. "Land use regulation and new construction," Regional Science and Urban Economics, Elsevier, vol. 30(6), pages 639-662, December.
    7. Ihlanfeldt, Keith R., 2007. "The effect of land use regulation on housing and land prices," Journal of Urban Economics, Elsevier, vol. 61(3), pages 420-435, May.
    8. Page Marianne, 1995. "Racial and Ethnic Discrimination in Urban Housing Markets: Evidence from a Recent Audit Study," Journal of Urban Economics, Elsevier, vol. 38(2), pages 183-206, September.
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    Cited by:

    1. Gluszak, Michal & Zygmunt, Robert, 2018. "Development density, administrative decisions, and land values: An empirical investigation," Land Use Policy, Elsevier, vol. 70(C), pages 153-161.
    2. Chris Cunningham, 2013. "Estimating the holdout problem in land assembly," FRB Atlanta Working Paper 2013-19, Federal Reserve Bank of Atlanta.
    3. Coulson, N. Edward & Li, Herman, 2010. "The effect of risk on the effect of a land tax: A simulation," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 530-537, November.
    4. Keith Ihlanfeldt & Tom Mayock, 2014. "Housing Bubbles and Busts: The Role of Supply Elasticity," Land Economics, University of Wisconsin Press, vol. 90(1), pages 79-99.
    5. Peter Chinloy & Jonathan Wiley, 2013. "Renegade Asset Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 47(2), pages 197-226, August.
    6. Sunding, David L. & Swoboda, Aaron M., 2010. "Hedonic analysis with locally weighted regression: An application to the shadow cost of housing regulation in Southern California," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 550-573, November.

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