Working Paper: NBER ID: w8835
Authors: Edward L. Glaeser; Joseph Gyourko
Abstract: Does America face an affordable housing crisis and, if so, why? This paper argues that in much of America the price of housing is quite close to the marginal, physical costs of new construction. The price of housing is significantly higher than construction costs only in a limited number of areas, such as California and some eastern cities. In those areas, we argue that high prices have little to do with conventional models with a free market for land. Instead, our evidence suggests that zoning and other land use controls, play the dominant role in making housing expensive.
Keywords: No keywords provided
JEL Codes: R
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Zoning regulations (R52) | High housing prices (R31) |
| High housing prices (R31) | Discrepancies in land valuation (Q15) |
| Regulatory constraints (G18) | Discrepancies in land valuation (Q15) |
| High regulations (L51) | Elevated housing costs (R21) |
| High prices (D49) | No correlation with lower density (C10) |
| Zoning (R52) | Housing affordability (R31) |