The Housing Market Effects of Discrete Land Use Regulations: Evidence from the California Coastal Boundary Zone

The California Coastal Act is a distinctive piece of land use regulation. Its intent is to preserve a unique environmental asset. This paper has used two different data sets to document the unintended consequences of this environmental/land use regulation. We find that this regulation has led to increased population density within the CBZ area and that gentrification has taken place. This regulation has acted as a barrier to entry for prospective new development and this in turn raises local home prices…
When controlling for [other factors], we find that homes just within the CBZ zone sell for over a 20% price premium.

Matthew E. Kahn, Ryan Vaughn, and Jonathan Zasloffc

Journal of Housing Economics

December 2010

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