Rent Seeking in a Static Model of Zoning

Richard W. Ault and Robert B. Ekelund ()

Real Estate Economics, 1988, vol. 16, issue 1, pages 69-76

Abstract: This paper uses a traditional, static view of zoning to illustrate the costly, rent-seeking behavior that results from zoning. A simple graphical model is developed and used to illustrate the size of rent-seeking costs when various levels of development are permitted and when different schemes are used by zoning authorities to allocate development permits. The model shows that allocation schemes designed to minimize rent-seeking fail to allocate permits to the highest-valued users. Zoning models that ignore the costs of rent-seeking and misallocation are found to seriously overstate the potential gains from zoning. Copyright American Real Estate and Urban Economics Association.

Date: 1988

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