Not My Problem: Growth Spillovers from Uncoordinated Land Use Policy

Abstract

Land use policy is administered at the local level in the U.S. However, many of the benefits and costs have broader spatial impacts. Thus, a lack of coordination across local jurisdictions may lead to unintended spillovers. Using historical data from the Baltimore, Maryland metro, we examine the impact that an extensive zoning policy change in Baltimore County had on new housing supply in surrounding counties. Defining treatment and control locations in surrounding counties based on their adjacency to Baltimore County, we find that the change in zoning policy led to an increase in housing supply of 42%-97% in adjacent counties. In both spatial and temporal falsification tests, we fail to find evidence of a spillover effect suggesting that the increased development was likely the result of spillovers from uncoordinated policy.

Keywords: Housing Supply, Land Use Regulation, Spatial Spillovers, Urban Economics

JEL Classification: Q15, R14, R21, R30