Local causes and aggregate implications of land use regulation

Andrii Parkhomenko

Journal of Urban Economics, 2023, vol. 138, issue C

Abstract: I study why some cities have strict land use regulation, how regulation affects the U.S. economy, and how policymakers can mitigate its negative consequences. I develop a quantitative spatial equilibrium model where local regulation is determined endogenously, by voting. Landowners in productive cities with attractive amenities vote for strict regulation. The model accounts for 40% of the observed differences in regulation across cities. Quantitative experiments show that excessive local regulation reduces aggregate productivity, but not necessarily welfare because, unlike renters, landowners benefit from regulation. I propose federal policies that raise productivity and welfare by weakening incentives to regulate land use.

Keywords: Land use regulation; Spatial equilibrium; Productivity; Housing (search for similar items in EconPapers)
JEL-codes: E24 H20 R31 R52 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:138:y:2023:i:c:s009411902300075x

DOI: 10.1016/j.jue.2023.103605

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