The Economic Costs of Land Use Regulations

Land is among the most valuable assets in the United States, and its value is a function of how we use land and what we build on it. According to one study, the value of all land in the lower 48 states is estimated at about 1.4 times the nation’s Gross Domestic Product (GDP). Only 6 percent of the nearly 2 billion acres of land is developed, but this small share accounts for nearly half the total value of land. That is, each acre of developed land is worth over 16 times an acre of undeveloped land.
Land is also one of the most tightly regulated resources. We regulate both what we can build on land through zoning, and how we can build it through building codes. While they collectively determine land use, zoning and building codes operate in entirely different ways: zoning is rigid and prescriptive, and therefore limits opportunities of growth and inclusion (often times by design). Permitting is complex, uncertain, and therefore increases costs of construction as well as starting a business or building a house.

Yesim Sayin Taylor

D.C. Policy Center

November 2019

External Link