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

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

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    File URL: http://www.sciencedirect.com/science/article/B6WMG-4SY6W2C-1/2/4a0890c7fe54611e90c43860201f6b11
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    Article provided by Elsevier in its journal Journal of Urban Economics.

    Volume (Year): 65 (2009)
    Issue (Month): 3 (May)
    Pages: 265-278

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    Handle: RePEc:eee:juecon:v:65:y:2009:i:3:p:265-278
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622905

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    1. Joseph Gyourko & Albert Saiz, 2006. "Construction Costs And The Supply Of Housing Structure," Journal of Regional Science, Wiley Blackwell, vol. 46(4), pages 661-680.
    2. Edward L. Glaeser & Joseph Gyourko & Raven E. Saks, 2005. "Why Have Housing Prices Gone Up?," Harvard Institute of Economic Research Working Papers 2061, Harvard - Institute of Economic Research.
    3. Glaeser, Edward L. & Kahn, Matthew E. & Rappaport, Jordan, 2008. "Why do the poor live in cities The role of public transportation," Journal of Urban Economics, Elsevier, vol. 63(1), pages 1-24, January.
    4. John M. Quigley & Steven Raphael, 2005. "Regulation and the High Cost of Housing in California," American Economic Review, American Economic Association, vol. 95(2), pages 323-328, May.
    5. Brueckner, Jan K., 1983. "Property value maximization and public sector efficiency," Journal of Urban Economics, Elsevier, vol. 14(1), pages 1-15, July.
    6. Gyourko, Joseph & Saiz, Albert, 2004. "Reinvestment in the housing stock: the role of construction costs and the supply side," Journal of Urban Economics, Elsevier, vol. 55(2), pages 238-256, March.
    7. William A. Fischel, 1978. "A Property Rights Approach to Municipal Zoning," Land Economics, University of Wisconsin Press, vol. 54(1), pages 64-81.
    8. Jan K. Brueckner, 1990. "Growth Controls and Land Values in an Open City," Land Economics, University of Wisconsin Press, vol. 66(3), pages 237-248.
    9. 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.
    10. Edward L. Glaeser & Joseph Gyourko, 2003. "The impact of building restrictions on housing affordability," Economic Policy Review, Federal Reserve Bank of New York, issue Jun, pages 21-39.
    11. Maser, Steven M & Riker, William H & Rosett, Richard N, 1977. "The Effects of Zoning and Externalities on the Price of Land: An Empirical Analysis of Monroe County, New York," Journal of Law and Economics, University of Chicago Press, vol. 20(1), pages 111-32, April.
    12. Henry O. Pollakowski & Susan M. Wachter, 1990. "The Effects of Land-Use Constraints on Housing Prices," Land Economics, University of Wisconsin Press, vol. 66(3), pages 315-324.
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