Far Regulations and the Spatial Size of Brazilian Cities

38 Pages Posted: 20 Jan 2023

See all articles by Ricardo C. A. Lima

Ricardo C. A. Lima

Catholic University of Brasília (UCB)

Leonardo Monasterio

Institute of Applied Economic Research - Brazil; Brazilian Institute of Teaching Development and Research (IDP)

Abstract

This paper evaluates the influence of the maximum-allowed floor area ratio (FAR) on the spatial size of Brazilian cities. We built a novel database on building height restrictions for the 325 largest cities in the country and combined it with recent satellite data. Our estimations show that, as predicted by theory, tighter constraints lead to an increase in urban areas, and this result is robust to several specifications, sensitivity tests, and different estimation strategies. Using the share of homeowners among high-income households as an instrumental variable for FAR stringency, we find that the decrease of one standard deviation in the maximum-allowed FAR increases the spatial area of a city by 12.4%. Additionally, back-to-the-envelope calculations show that a higher stringency of the building height regulation generates an annual cost of about US$ 9.58 million per average Brazilian city.

Keywords: FAR Regulations, Urban sprawl, Land-use Restrictions, Brazil

Suggested Citation

Lima, Ricardo Carvalho de Andrade and Monasterio, Leonardo, Far Regulations and the Spatial Size of Brazilian Cities. Available at SSRN: https://ssrn.com/abstract=4331265 or http://dx.doi.org/10.2139/ssrn.4331265

Ricardo Carvalho de Andrade Lima (Contact Author)

Catholic University of Brasília (UCB) ( email )

Brasilia
Brazil

Leonardo Monasterio

Institute of Applied Economic Research - Brazil ( email )

SBS QD 1 BLOCO J ED BNDES
SALA 1409
BRASILIA, Distrito Federal 70076900
Brazil

HOME PAGE: http://www.ipea.gov.br

Brazilian Institute of Teaching Development and Research (IDP) ( email )

Brazil

HOME PAGE: http://www.idp.edu.br

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