Study: Land Use Regulation Slows Economic Growth

Laura Kusisto shares news of a recent addition to the body of research that makes the case against land use regulation. First, the context for the article:

In this year’s election, candidates have focused blame for rising income inequality on broad economic forces, from globalization to the decline of the American manufacturing base. But a growing body of research suggests a more ordinary factor: the price of the average single-family home for sale, from Fairfield, Conn., to Portland, Ore.

Prior to detailing the new research, Kusisto employs an anecdote from the city of San Francisco, where developer Patrick Kennedy is attempting to get approval for an apartment complex near the city's financial district. A rule that would limit the number of units—both market rate and affordable, has Kennedy willing to turn a memorable phrase: "There are a lot of ways you can have modern-day Jim Crow through zoning," he says.

Kusisto's main purpose is to introduce research by Daniel Shoag, an associate professor of public policy at Harvard University, and Peter Ganong, a postdoctoral fellow at the National Bureau of Economic Research, into the discussion about housing supply and land use regulation. The research "looked at mentions of 'land-use' in appeals-court cases and found the number of references began rising sharply around 1970, with some states seeing a much larger increase than others." This, explains Kusisto by way of explaining the study, "while such efforts are well intentioned, they are having an unintended side effect: increasing social stratification between wealthier and poorer areas."

The article includes evidence from the study of high-regulation, wealthier states stagnating, while low-regulation states have continued to speed ahead.

[The article might be behind a paywall for some readers.]