Warding Off Development: Local Control, Housing Supply, and NIMBYs

Abstract

Local control of land-use regulation creates a not-in-my-backyard (NIMBY) problem that can suppress housing construction, contributing to rising prices and potentially slowing economic growth. I study how increased local control affects housing production by exploiting a common electoral reform — changing from “at-large” to “ward” elections for town council. These reforms, which are not typically motivated by housing markets, shrink each representative’s constituency from the entire town to one ward. Difference-in-differences estimates show that this decentralization decreases housing units permitted by 24 percent, with 47 percent and 12 percent effects on multi- and single-family units. The effect on multifamily is larger in high-home-ownership towns.

Keywords: Housing Supply, Land-Use Regulation, NIMBYism

JEL Classification: R31, R38, H77