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Real Estate & Planning Research Seminar by Professor Paavo Monkkonen (UCLA) "Built out Cities ? A new Approach to Measuring Land Use regulation"

Event information
Date 13 March 2024
Time 13:00-14:00 (Timezone: Europe/London)
Venue Henley Business School
Event types:

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Bio: Paavo Monkkonen is Professor of Urban Planning and Public Policy at the UCLA Luskin School of Public Affairs, currently a visiting researcher at Sciences Po Paris. He has published over 40 articles on the ways policies and markets shape housing development, urbanization, and social segregation in cities around the world. His research ranges from studies of national housing finance programs to the impacts of local land use regulations, and spans several countries in the Americas and Asia. Paavo recently launched the UCLA Latin American Cities Initiative, Ciudades, to deepen knowledge networks among students, educators, and urban planners in South, Central, and North America. His current project is a comparison between fair housing policies and urban planning practice in California and several European countries.

Abstract: We introduce a new way to measure the stringency of housing regulation. Rather than a standard regulatory index or a single aspect of regulation like Floor Area Ratio, we draw on cities’ self-reported estimates of their total zoned capacity for new housing. This measure, available to us as a result of state legislation in California, offers a more accurate way to assess local antipathy towards new housing, and also offers a window into how zoning interacts with existing buildout. We show, in regressions analyzing new housing permitting, that our measure has associations with new supply that are as large or larger than conventional, survey-based indexes of land use regulation. Moreover, unbuilt zoning capacity interacts with rent to predict housing production in ways conventional measures do not. Specifically, interacting our measure with rent captures the interplay of regulation and demand: modest deregulation in high-demand cities is associated with substantially more housing production than substantial deregulation in low-demand cities. These findings offer a more comprehensive explanation for the historically low levels of housing production in high cost metros.