An Examination of the Monopoly Zoning Hypothesis
There have been several studies that have investigated the effect of zoning on housing prices. One hypothesis is that the restrictiveness of zoning laws will vary with the monopoly power of a town. The degree of monopoly power varies with the number of towns in the urban area. Urban areas with few zoning jurisdictions are likely to have higher housing prices than more fragmented urban areas. Previous research on this topic has shown mixed results. The results in this article suggest that towns with more monopoly power do tend to have significantly higher housing prices than more fragmented urban areas.