Supply Constraints and Housing Prices
16 Pages Posted: 24 May 2006
Date Written: May 22, 2006
Abstract
This paper analyzes the effects of land use constraints on housing prices. We provide a new framework for evaluating policy when mobility across regions is allowed but limited. A key result is that loosening regulatory constraints within individual regions would have little effect on prices for plausible parameterizations. For example, we show reasonable conditions under which, even if every building in Manhattan were 100 stories tall, prices would fall by less than 15 percent.
Keywords: Housing Supply and Markets, Regulatory Policies, Land Use Patterns
JEL Classification: R31, R38, R52, R14
Suggested Citation: Suggested Citation
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