Elasticidad de los precios de viviendas frente a regulaciones urbanas: Evidencia por el lado de la oferta en Santiago, Chile[How sensitive are housing prices to urban regulations? Supply-side evidence from Santiago, Chile]

This study presents causal evidence elucidating the impact of urban regulations on housing prices through two opposing mechanisms: land value capitalization and construction cost efficiencies. Utilizing instrumental variables and transaction-level data, the research reveals that a 1% increase in building height results in a 0.10% reduction in prices, whereas the floor-area ratio leads to a 0.25% increase. Additionally, density (-0.16%) contributes to price reductions, aligning with efficient land utilization, while lot coverage operates as a price-increasing variable (0.13%). These effects demonstrate significant heterogeneity across urban contexts, with complete sign reversals contingent upon location and income. For example, the price-reducing effect of height is predominantly observed in low-value land and areas with high accessibility, yet it reverses to a price-increasing effect in peripheral locations. The study identifies notable complementarities among regulations, emphasizing developers’ strategic packaging of norms, particularly in the triple interaction between height, lot coverage, and floor-area ratio. The findings challenge uniform regulatory approaches, suggesting that policies aimed at affordability should advocate for strategic combinations of height and density, tailored to local market contexts.