Owners of developed land versus owners of undeveloped land: why land use is more constrained in the Bay Area than in Pittsburgh

Christian Hilber and Frederic Robert-Nicoud

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We model residential land use constraints as the outcome of a political economy game between owners of developed and owners of undeveloped land. Land use constraints are interpreted as shadow taxes that increase the land rent of already developed plots and reduce the amount of new housing developments. In general equilibrium, locations with nicer amenities are more developed and, as a consequence, more regulated. We test our model predictions by geographically matching amenity, land use, and historical Census data to metropolitan area level survey data on regulatory restrictiveness. Following the predictions of the model, we use amenities as instrumental variables and demonstrate that metropolitan areas with better amenities are more developed and more tightly regulated than other areas. Consistent with theory, metropolitan areas that are more regulated also grow more slowly.

Keywords: land use regulations; zoning; land ownership; housing supply (search for similar items in EconPapers)
JEL-codes: H7 Q15 R52 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2006-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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http://eprints.lse.ac.uk/4384/ Open access version. (application/pdf)

Related works:
Working Paper: Owners of Developed Land versus Owners of Undeveloped Land: Why Land Use is More Constrained in the Bay Area than in Pittsburgh (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:4384

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