Housing Prices, Externalities, and Regulation in U.S. Metropolitan Areas

Abstract

Housing prices vary widely between U.S. markets. The purpose of this study is to analyze determinants of housing prices, with particular focus on the effects of regulations in land and housing markets. The basic unit of observation is the city or metropolitan area. The innovative part of the data collection is constructing indexes that reflect regulatory regimes in different markets. The basic method is to model house prices and rents in a simple supply and demand framework focusing on incomes, population changes, "noneconomic" determinants (such as topographical features), and other supply conditions, notably measures of the regulatory environment.

JEL Classification: D46