Working Paper: NBER ID: w11129
Authors: Edward L. Glaeser; Joseph Gyourko; Raven E. Saks
Abstract: Since 1950, housing prices have risen regularly by almost two percent per year. Between 1950 and 1970, this increase reflects rising housing quality and construction costs. Since 1970, this increase reflects the increasing difficulty of obtaining regulatory approval for building new homes. In this paper, we present a simple model of regulatory approval that suggests a number of explanations for this change including changing judicial tastes, decreasing ability to bribe regulators, rising incomes and greater tastes for amenities, and improvements in the ability of homeowners to organize and influence local decisions. Our preliminary evidence suggests that there was a significant increase in the ability of local residents to block new projects and a change of cities from urban growth machines to homeowners' cooperatives.
Keywords: No keywords provided
JEL Codes: O2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| regulatory barriers (L51) | rising housing prices (R31) |
| local residents blocking new projects (R52) | transition from urban growth machines to homeowners' cooperatives (R21) |
| stricter regulations (G18) | higher price increases relative to construction costs (L74) |
| regulatory costs (L51) | housing prices (R31) |
| regulatory changes (G18) | decline in new construction in high-price areas (R31) |