Quantifying Land-Use Regulation and its Determinants

41 Pages Posted: 28 Mar 2022 Last revised: 25 May 2023

See all articles by Simon Büchler

Simon Büchler

Massachusetts Institute of Technology (MIT), Center of Real Estate; University of Bern

Maximilian von Ehrlich

University of Bern

Date Written: March 25, 2022

Abstract

We analyze land-use regulation and the determinants thereof across Swiss municipalities. We construct several residential development stringency indices based on a comprehensive survey. These indices capture various aspects of local regulation and land-use coordination across jurisdictions. Combining these indices, we construct an index that provides harmonized information about what local regulation entails and the local regulatory environment across municipalities. Our analysis shows that historical building density, natural amenities, socio-demographic factors, cultural aspects, and municipal competition are important determinants of local land-use regulation. However, a large share of land-use regulation variation remains unexplained. Our results show that more stringent land-use regulation is associated with steeper house price increases but less urban sprawl. We test the validity of the index with regard to local refusal rates of development projects and show that the index captures a significant part of the variation in local housing supply elasticities. Based on a machine learning cross-validation model, we impute the values for non-responding municipalities.

Keywords: Local regulation, zoning, federalism, determinants of regulation

JEL Classification: H7, H73, R1, R14, R31, R52

Suggested Citation

Büchler, Simon and Ehrlich, Maximilian von, Quantifying Land-Use Regulation and its Determinants (March 25, 2022). MIT Center for Real Estate Research Paper No. 22/02, Available at SSRN: https://ssrn.com/abstract=4066700 or http://dx.doi.org/10.2139/ssrn.4066700

Simon Büchler (Contact Author)

Massachusetts Institute of Technology (MIT), Center of Real Estate ( email )

United States

University of Bern ( email )

Gesellschaftsstrasse 49
Bern, BERN 3001
Switzerland
3001 (Fax)

Maximilian von Ehrlich

University of Bern

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