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The Incidence of the Land Use Regulatory Tax

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  • Ron Cheung
  • Keith Ihlanfeldt
  • Tom Mayock

Abstract

Land use regulation has been found to impose a substantial tax on housing within select U.S. metropolitan areas. In this article, we develop hypotheses regarding the incidence of this tax by income class and racial group within these areas. Parcel‐level data from Miami‐Dade County, Florida, are used to test our hypotheses. We find that, while the tax rises with a household's permanent income, this rise is less than proportional, making it a regressive tax. We also find, controlling for household permanent income, that the tax is a higher percentage of the price of homes located in black neighborhoods in comparison to those located in white or Hispanic neighborhoods.

Suggested Citation

  • Ron Cheung & Keith Ihlanfeldt & Tom Mayock, 2009. "The Incidence of the Land Use Regulatory Tax," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 37(4), pages 675-704, December.
    • Handle: RePEc:bla:reesec:v:37:y:2009:i:4:p:675-704
    DOI: 10.1111/j.1540-6229.2009.00260.x
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    References listed on IDEAS

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    Cited by:

    1. Daniel Shoag & Stan Veuger, 2019. "Do land use restrictions increase restaurant quality and diversity?," Journal of Regional Science, Wiley Blackwell, vol. 59(3), pages 435-451, June.
    2. Peter Chinloy & Jonathan Wiley, 2013. "Renegade Asset Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 47(2), pages 197-226, August.
    3. Gluszak, Michal & Zygmunt, Robert, 2018. "Development density, administrative decisions, and land values: An empirical investigation," Land Use Policy, Elsevier, vol. 70(C), pages 153-161.
    4. Coulson, N. Edward & Li, Herman, 2010. "The effect of risk on the effect of a land tax: A simulation," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 530-537, November.
    5. Sunding, David L. & Swoboda, Aaron M., 2010. "Hedonic analysis with locally weighted regression: An application to the shadow cost of housing regulation in Southern California," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 550-573, November.
    6. Chris Cunningham, 2013. "Estimating the holdout problem in land assembly," FRB Atlanta Working Paper 2013-19, Federal Reserve Bank of Atlanta.
    7. Keith Ihlanfeldt & Tom Mayock, 2014. "Housing Bubbles and Busts: The Role of Supply Elasticity," Land Economics, University of Wisconsin Press, vol. 90(1), pages 79-99.

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