Bunching in real-estate markets: Regulated building heights in New York City

Jan K. Brueckner, David Leather and Miguel Zerecero

Journal of Urban Economics, 2024, vol. 143, issue C

Abstract: This paper presents a real-estate application of the bunching methodology widely used in other areas of applied microeconomics. The focus is on regulated building heights in New York City, where developers can exceed a parcel’s regulated height by incurring additional costs. Using the bunching methodology, we estimate the magnitude of these extra costs, with the results showing a modest increase in the marginal cost of floor space beyond the regulated building height. We use these estimates to predict the additional floor space that would be created by complete removal of building-height regulation in NYC. While this last exercise is circumscribed by our focus on a limited number of zoning categories, the results suggest that New York could secure notably more housing through lighter height regulation.

Keywords: Building heights; FAR; Regulation; Housing supply; Bunching (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:143:y:2024:i:c:s0094119024000536

DOI: 10.1016/j.jue.2024.103683

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