Green parties and building permissions: Evidence from Bavarian municipalities

Patrick Hufschmidt

No 1052, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: This paper studies whether the rise of environmental parties during the last few decades can provide an explanation for reduced housing supply. Specifically, we examine the impact of Green Party presence on short-term housing supply in Bavarian municipalities from 1987 to 2019. Using a set of staggered difference-in-differences approaches and a large panel data set, we find that the entry of Green Party members into municipal councils leads to an approximate 5.6% decrease in the short-term issuance of building permits. Our results suggest that even in minority positions, Green Party members can influence local decision-making through highlighting the negative externalities associated with construction projects. Moreover, this influence may lead to policy convergence, where other parties adopt some elements of the Green Party's environmental agenda to appeal to environmentally conscious voters. Overall, our study contributes to understanding the trade-offs between housing supply and environmental protection in decentralized democratic settings and sheds light on the role of Green Party members in shaping local land use policy.

Keywords: Party effects; housing supply; land use policies; natural resources; difference-indifferences (search for similar items in EconPapers)
JEL-codes: H73 H77 Q56 R31 R38 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:280424

DOI: 10.4419/96973221

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