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Determinants of local housing growth in a multi-jurisdictional region, along with a test for nonmarket zoning

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  • Gottlieb, Paul D.
  • O’Donnell, Anthony
  • Rudel, Thomas
  • O’Neill, Karen
  • McDermott, Melanie

Abstract

In the State of New Jersey, two rural preservation tools are paramount: (1) Zoning that sets a floor on the size of residential lots; and (2) the outright acquisition of open space or its development rights by government and nonprofit entities. The present study explores the effects of these two policies on the number of building permits issued across 83 municipalities in northern New Jersey. The empirical work is based on a widely-used urban development model that uses both monocentric and polycentric factors to allocate growth across a set of suburban communities. The study also develops a growth-based test for binding minimum-lot-size zoning, leveraging the fact that the 83 communities are in a single housing market and must serve the distribution of home and lot-size demand collectively, not individually. The study finds strong evidence of excess large-lot zoning, leading to the suppression of short-term housing growth in communities that specialize in this particular “product.” No firm evidence is found that residential development is attracted to the amenities that flow from either large-lot zoning or open space set asides.

Suggested Citation

  • Gottlieb, Paul D. & O’Donnell, Anthony & Rudel, Thomas & O’Neill, Karen & McDermott, Melanie, 2012. "Determinants of local housing growth in a multi-jurisdictional region, along with a test for nonmarket zoning," Journal of Housing Economics, Elsevier, vol. 21(4), pages 296-309.
  • Handle: RePEc:eee:jhouse:v:21:y:2012:i:4:p:296-309 DOI: 10.1016/j.jhe.2012.08.003
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    References listed on IDEAS

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    Cited by:

    1. Paul Gottlieb, 2013. "Agricultural preservation, large-lot zoning, and real estate development in New Jersey, USA," ERSA conference papers ersa13p513, European Regional Science Association.

    More about this item

    Keywords

    R11; R21; R31; R52; R58; Zoning; Open space; Residential development; Growth management; Rural preservation;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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