Land Use Reform

Land use reform describes attempts to change legislation regulating the construction of dense housing in urban areas.

The problem

Laws at the local level in the United States and many other countries impose strict limits on how much total floor area can be built on a plot of land. Such zoning laws constitute a major obstacle to the construction of dense housing. The resulting increase in housing prices reduces economic efficiency by creating significant deadweight loss; increases inequality by transferring wealth from renters to landowners; and reduces both wages and total economic output by preventing workers from relocating where they can be most productive.

The effects of zoning laws on housing prices can be estimated by comparing the sale price of housing to the associated costs of land and construction (Glaser, Gyourko & Saks 2005). Open Philanthropy has combined these estimates with rent data and some additional assumptions to conclude that the aggregate "tax" on renters in five large metropolitan areas amounts to over $100 billion in deadweight loss per year (Open Philanthropy 2015: sect. 1)....

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