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The causes and consequences of land use regulation: Evidence from Greater Boston

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  • Glaeser, Edward L.
  • Ward, Bryce A.

Abstract

Over the past 30 years, eastern Massachusetts has seen a remarkable combination of rising home prices and declining supply of new homes, which doesn't appear to reflect any lack of land. In this paper, we examine the increasing number of land-use regulations in Greater Boston. These regulations vary widely over space, and are hard to predict with any variables other than historical density levels. Minimum lot size and other land use controls are associated with reductions in new construction activity. These regulations are associated with higher prices when we do not control for contemporary density and demographics, but not when we add these contemporaneous controls. These results are compatible with economic theory, which predicts that production restraints on a good won't increase the price of that good relative to sufficiently close substitutes. Current density levels appear to be too low to maximize local land values.

Suggested Citation

  • Glaeser, Edward L. & Ward, Bryce A., 2009. "The causes and consequences of land use regulation: Evidence from Greater Boston," Journal of Urban Economics, Elsevier, vol. 65(3), pages 265-278, May.
  • Handle: RePEc:eee:juecon:v:65:y:2009:i:3:p:265-278
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    More about this item

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • 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

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