Local Causes and Aggregate Implications of Land Use Regulation

I study why some cities have strict land use regulation, how regulation affects the U.S. economy, and how policymakers can mitigate its negative consequences. I develop a quantitative spatial equilibrium model where local regulation is determined endogenously, by voting. Homeowners in productive cities with attractive amenities vote for strict regulation. The model accounts for one-third of the observed variation in regulation across cities. Quantitative experiments show that excessive local regulation reduces aggregate productivity, but not necessarily welfare because, unlike renters, homeowners benefit from regulation. I propose federal policies that raise productivity and welfare by weakening incentives to regulate land use