The Interjurisdictional Effects of Growth Controls on Housing Prices

In recent years in the United States, government regulation of the housing industry has increased dramatically. During the late 1960s and early 1970s, many communities became increasingly dissatisfied with the effects of rapid, unregulated suburban growth on the overall quality of life. This increased awareness of the environmental, social, and economic effects of new residential development led to a widespread proliferation of land-use and environmental regulations. While this growth of regulation has proceeded at all levels of government, the bulk of control over residential development remains in the hands of local governments. This increase in land-use controls means that the home-building industry has to work within a much more complex and often costly regulatory framework.
Local governments use a wide variety of procedures to control the location, timing, character, and amount of residential development. Traditionally, communities have relied on zoning and subdivision ordinances, building codes, and communitywide land-use plans as the major tools for the regulation of new development. In recent years, more sophisticated and complex regulatory procedures have been developed and utilized widely by municipalities. In many communities, traditional landuse controls have been augmented by environmental and fiscal effect procedures, urban growth management systems, utility connection moratoria, multiple-permit systems, overall growth limitations, or a combination of those measures.

Lawrence F. Katz and Kenneth T. Rosen

Journal of Law and Economics

April 1987

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