On the Origins of Land Use Regulations: Theory and Evidence from US Metro Areas

54 Pages Posted: 11 Jan 2010  

Christian A. L. Hilber

London School of Economics (LSE) - Department of Geography and Environment; London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); Spatial Economics Research Centre (SERC)

Frederic Robert-Nicoud

University of Geneva - Department of Political Economics; Centre for Economic Policy Research (CEPR)

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Date Written: December 2009

Abstract

We model residential land use constraints as the outcome of a political economy game between owners of developed and owners of undeveloped land. Land use constraints benefit the former group (via increasing property prices) but hurt the latter (via increasing development costs). More desirable locations are more developed and, as a consequence of political economy forces, more regulated. Using an IV approach that directly follows from our model we find strong and robust support for our predictions. The data provide weak or no support for alternative hypotheses whereby regulations reflect the wishes of the majority of households or efficiency motives.

Keywords: housing supply, land ownership, land use regulations, zoning

JEL Classification: H7, Q15, R52

Suggested Citation

Hilber, Christian A. L. and Robert-Nicoud, Frederic, On the Origins of Land Use Regulations: Theory and Evidence from US Metro Areas (December 2009). CEPR Discussion Paper No. DP7604. Available at SSRN: https://ssrn.com/abstract=1533209

Christian A. L. Hilber (Contact Author)

London School of Economics (LSE) - Department of Geography and Environment ( email )

Houghton Street
WC2A 2AE London
United Kingdom

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Spatial Economics Research Centre (SERC) ( email )

United Kingdom

Frederic L. Robert-Nicoud

University of Geneva - Department of Political Economics ( email )

40, boulevard du Pont-d'Arve
Geneva 4, CH-1211
Switzerland
+41 22 379 8272 (Phone)
+41 22 379 8293 (Fax)

HOME PAGE: http://www.unige.ch/ses/ecopo/staff/robert/home.html

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

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