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Empty homes, longer commutes: The unintended consequences of more restrictive local planning

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  • Cheshire, Paul
  • Hilber, Christian A.L.
  • Koster, Hans R.A.

Abstract

We investigate the impact of land use regulation on housing vacancy rates. Using a 30-year panel dataset on land use regulation for 350 English Local Authorities (LAs) and addressing potential reverse causation and other endogeneity concerns, we find that tighter local planning constraints increase local housing vacancy rates: a one standard deviation increase in restrictiveness causes the local vacancy rate to increase by 0.9 percentage points (23%). The same increase in local restrictiveness also causes a 6.1% rise in commuting distances. The results underline the interdependence of local housing and Labour markets and the unintended adverse impact of more restrictive planning policies.

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  • Cheshire, Paul & Hilber, Christian A.L. & Koster, Hans R.A., 2018. "Empty homes, longer commutes: The unintended consequences of more restrictive local planning," Journal of Public Economics, Elsevier, vol. 158(C), pages 126-151.
    • Handle: RePEc:eee:pubeco:v:158:y:2018:i:c:p:126-151
    DOI: 10.1016/j.jpubeco.2017.12.006
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    3. Ross Kendall & Peter Tulip, 2018. "The Effect of Zoning on Housing Prices," RBA Research Discussion Papers rdp2018-03, Reserve Bank of Australia.
    4. Evelyn Blumenberg & Fariba Siddiq, 2023. "Commute distance and jobs-housing fit," Transportation, Springer, vol. 50(3), pages 869-891, June.
    5. Gandhi, Sahil & Green, Richard K. & Patranabis, Shaonlee, 2022. "Insecure property rights and the housing market: Explaining India’s housing vacancy paradox," Journal of Urban Economics, Elsevier, vol. 131(C).
    6. Ehrlich, Maximilian V. & Hilber, Christian A.L. & Schöni, Olivier, 2018. "Institutional settings and urban sprawl: Evidence from Europe," Journal of Housing Economics, Elsevier, vol. 42(C), pages 4-18.
    7. Hangtian Xu, 2023. "Commercial‐to‐residential land‐use conversion and residential recentralization in large cities," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(1), pages 306-338, February.
    8. Kohei Kawai & Masatomo Suzuki & Chihiro Shimizu, 2019. "Shrinkage in Tokyo’s Central Business District: Large-Scale Redevelopment in the Spatially Shrinking Office Market," Sustainability, MDPI, vol. 11(10), pages 1-17, May.
    9. Molloy, Raven, 2020. "The effect of housing supply regulation on housing affordability: A review," Regional Science and Urban Economics, Elsevier, vol. 80(C).
    10. Viladecans-Marsal, Elisabet & Garcia-Lopez, Miquel-Angel & Pasidis, Ilias, 2018. "Amphitheaters, cathedrals and operas: The role of historic amenities on suburbanization," CEPR Discussion Papers 13129, C.E.P.R. Discussion Papers.
    11. Paul Cheshire, 2018. "Broken Market or Broken Policy? The Unintended Consequences of Restrictive Planning," National Institute Economic Review, National Institute of Economic and Social Research, vol. 245(1), pages 9-19, August.
    12. Hans Koster, "undated". "The Welfare Effects of Greenbelt Policy: Evidence from England," Tinbergen Institute Discussion Papers 19-023/VIII, Tinbergen Institute.
    13. Alexis Poulhès & Angèle Brachet, 2021. "Does Revitalizing the Center of Mid-Sized French Cities Reduce GHG Emissions from Commuting?," Sustainability, MDPI, vol. 13(4), pages 1-19, February.
    14. Albert Solé-Ollé & Elisabet Viladecans-Marsal & José Mª Durán-Cabré & Thomas Davidoff & Mariona Segú, 2018. "Tourism and Gentrification in Global Cities: Could Fiscal Policy be Useful? / Turismo y gentrificación en ciudades globales: ¿podría ser útil la política fiscal? / Turisme i gentrificació en ciutats g," IEB Reports ieb_report_2_2018, Institut d'Economia de Barcelona (IEB).
    15. Paul Cheshire, 2019. "The Costs of Containment: Or the Need to Plan for Urban Growth," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 20(03), pages 10-14, October.

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    More about this item

    Keywords

    Residential vacancy rates; Housing supply constraints; Land use regulation;
    All these keywords.

    JEL classification:

    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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