IDEAS home Printed from https://ideas.repec.org/p/uab/wprdea/wpdea2516.html

Modelling the Aggregate Effects of Housing Supply Policies

Author

Listed:
  • Gabriele Guaitoli

    (Departament of Applied Economics, Universitat Autònoma de Barcelona, Spain)

Abstract

What are the aggregate effects of housing supply-side policies, such as zoning reforms? In structural models, the answer involves characterising the equilibrium housing price function. I show that a housing price function should separately characterise how policies affect: 1) the response of house prices to new demand ("Elasticity Effect''); 2) the cost of satisfying existing housing demand ("Baseline Effect''). While the former can be calibrated to match estimates of price-demand elasticities such as Saiz (2010), the latter requires a separate calibration. However, popular models in Urban Economics and Economic Geography do not separately characterise and calibrate the Baseline and Elasticity Effects, introducing potential biases in the estimation of long-run policy effects. I propose a characterisation that makes such biases explicit, nests most popular characterisations, and allows to separately characterise and estimate the two effects. Calibrating the Baseline Effect to conservative empirical estimates from the literature, I find housing supply policy effects up to one order of magnitude larger than other characterisations applied to the same model.

Suggested Citation

  • Gabriele Guaitoli, 2025. "Modelling the Aggregate Effects of Housing Supply Policies," Working Papers wpdea2516, Department of Applied Economics at Universitat Autonoma of Barcelona.
    • Handle: RePEc:uab:wprdea:wpdea2516
    as

    Download full text from publisher

    File URL: https://ddd.uab.cat/repec/doc/wpdea2516.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Edward L. Glaeser & Joseph Gyourko, 2025. "America's Housing Supply Problem: The Closing of the Suburban Frontier?," NBER Working Papers 33876, National Bureau of Economic Research, Inc.
    2. Rebecca Diamond, 2017. "Housing Supply Elasticity and Rent Extraction by State and Local Governments," American Economic Journal: Economic Policy, American Economic Association, vol. 9(1), pages 74-111, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Guedes, Ricardo & Iachan, Felipe S. & Sant’Anna, Marcelo, 2023. "Housing supply in the presence of informality," Regional Science and Urban Economics, Elsevier, vol. 99(C).
    2. Ruben Enikolopov, 2011. "Are Bureaucrats Really Paid Like Bureaucrats?," Working Papers w0165, Center for Economic and Financial Research (CEFIR).
    3. Xiaolun Yu, 2024. "Low‐rise buildings in big cities: Theory and evidence from China," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 52(2), pages 366-400, March.
    4. Geschwind, Stephan & Roesel, Felix, 2022. "Taxation under direct democracy," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 536-554.
    5. Marius Brülhart & Jayson Danton & Raphaël Parchet & Jörg Schläpfer, 2025. "Who Bears the Burden of Local Taxes?," American Economic Journal: Economic Policy, American Economic Association, vol. 17(1), pages 464-505, February.
    6. repec:osf:socarx:mvhnf_v1 is not listed on IDEAS
    7. repec:osf:osfxxx:u9w63_v1 is not listed on IDEAS
    8. Brian Asquith & Evan Mast & Davin Reed, 2019. "Supply Shock Versus Demand Shock: The Local Effects of New Housing in Low-Income Areas," Upjohn Working Papers 19-316, W.E. Upjohn Institute for Employment Research.
    9. Chang-Tai Hsieh & Enrico Moretti, 2019. "Housing Constraints and Spatial Misallocation," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(2), pages 1-39, April.
    10. Davis, Matthew & Ferreira, Fernando, 2022. "Housing disease and public school finances," Economics of Education Review, Elsevier, vol. 88(C).
    11. Büchler, Simon & Ehrlich, Maximilian v. & Schöni, Olivier, 2021. "The amplifying effect of capitalization rates on housing supply," Journal of Urban Economics, Elsevier, vol. 126(C).
    12. Lönnroth, Tea & Krigsholm, Pauliina & Falkenbach, Heidi & Oikarinen, Elias, 2024. "Advancing understanding of the linkages between local land policy interventions and the responsiveness of housing supply: Intervention mechanisms in the Finnish context," Land Use Policy, Elsevier, vol. 141(C).
    13. Simon B chler, Maximilian v. Ehrlich, 2021. "Quantifying Land Use Regulation and its Determinants - Ease of Residential Development across Swiss Municipalities," Diskussionsschriften credresearchpaper32, Universitaet Bern, Departement Volkswirtschaft - CRED.
    14. Wenquan Liang & Ran Song & Christopher Timmins, 2020. "Frictional Sorting," NBER Working Papers 27643, National Bureau of Economic Research, Inc.
    15. J. Vernon Henderson & Matthew A. Turner, 2020. "Urbanization in the Developing World: Too Early or Too Slow?," Journal of Economic Perspectives, American Economic Association, vol. 34(3), pages 150-173, Summer.
    16. Tianzheng Zhang & Yingxiang Zeng & Yingjie Zhang & Yan Song & Hongxun Li, 2020. "Dynamic and Heterogeneous Demand for Urban Green Space by Urban Residents: Evidence from the Cities in China," Sustainability, MDPI, vol. 12(22), pages 1-15, November.
    17. Jan K. Brueckner & Matthew E. Kahn & Gary C. Lin, 2023. "A New Spatial Hedonic Equilibrium in the Emerging Work-from-Home Economy?," American Economic Journal: Applied Economics, American Economic Association, vol. 15(2), pages 285-319, April.
    18. Juan Carlos Lopez & Tadashi Morita, 2024. "Public good provision and progressive income taxation in a spatial economy," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 73(3), pages 979-1003, October.
    19. Tianzheng Zhang & Yingxiang Zeng & Yingjie Zhang & Yan Song & Hongxun Li, 2020. "The Heterogenous Demand for Urban Parks between Home Buyers and Renters: Evidence from Beijing," Sustainability, MDPI, vol. 12(21), pages 1-16, October.
    20. Wataru Takahashi, 2021. "Population Mobility Structural Analysis and Population Estimation Using a Quantitative Spatial Model," Discussion papers ron339, Policy Research Institute, Ministry of Finance Japan.
    21. David S. Bieri & Casey J. Dawkins, 2019. "Amenities, affordability, and housing vouchers," Journal of Regional Science, Wiley Blackwell, vol. 59(1), pages 56-82, January.
    22. Simon C Büchler & Dongxiao Niu & Anne K Thompson & Siqi Zheng, 2024. "The impact of human capital and housing supply on urban growth," Urban Studies, Urban Studies Journal Limited, vol. 61(2), pages 214-230, February.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uab:wprdea:wpdea2516. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dept. Economia Aplicada (email available below). General contact details of provider: https://edirc.repec.org/data/dauabes.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.