Working Paper: NBER ID: w12601
Authors: Edward L. Glaeser; Bryce A. Ward
Abstract: Over the past 30 years, eastern Massachusetts has seen a remarkable combination of rising home prices and declining supply of new homes. The reductions in new supply don't appear to reflect a real lack of land, but instead reflect a response to man-made restrictions on development. In this paper, we examine the land-use regulations in greater Boston. There has been a large increase in the number of new regulations, which differ widely over space. Few variables, other than historical density and abundant recreational water, reliably predict these regulations. High lot sizes and other regulations are associated with less construction. The regulations boost prices by decreasing density, but density levels seem far too low to maximize total land value.
Keywords: Land Use Regulation; Housing Prices; Construction; Greater Boston
JEL Codes: R14; R21; R31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increased land use regulations (R52) | decreased construction permits (L74) |
| minimum lot size regulations (G18) | number of new housing permits issued (R31) |
| each additional regulatory barrier (L59) | new construction (L74) |
| minimum lot size regulations (G18) | housing prices (R31) |
| density controls (C69) | disappearance of housing price effect (R31) |
| reductions in density (R23) | lower overall land value (R52) |