Local Control

Residential Land Use Regulation and the US Housing Price Cycle Between 2000 and 2009

Published: 2010 | Haifang Huang and Yao Tang | Journal of Urban Economics


In a sample covering more than 300 cities in the US between January 2000 and July 2009, we find that more restrictive residential land use regulations and geographic land constraints are linked to larger booms and busts in housing prices. The natural and man-made constraints also amplify price responses to an initial positive mortgage-credit supply shock, leading to greater price increases in the boom and subsequently bigger losses.