Housing Regulation, Externalities, and Residential Property Prices
Real Estate Economics, Forthcoming
Posted: 3 Jan 2013
Date Written: January 3, 2013
Abstract
This paper examines the effects of quantity restrictions on residential property prices in the presence of neighborhood externalities. A Brigham Young University policy limiting students’ location choices provides a natural experiment for studying the externality and quantity restriction effects on property values. A flexible hedonic model is used to control for non-student population spatial sorting by type. The estimates show significant positive quantity restriction and student agglomeration effects on student housing prices. There are also significant differences in the negative student externality across non-student neighborhoods, with the quantity restriction reinforcing (offsetting) the student price premium (discount) at the boundary.
Keywords: land use regulation, housing supply, housing supply restriction, student externality
JEL Classification: R33, H23, R52
Suggested Citation: Suggested Citation