Job Market Paper
“Decentralized Land-Use Regulation with Agglomeration Spillovers: Evidence from Aldermanic Privilege in Chicago” Paper
Best Paper Award - OSU Fisher Conference on Real Estate and Housing (2019); Best Paper Award - Illinois Economic Association (2019)
Abstract: I combine data on thousands of small zoning changes in Chicago with shifts in Alderman-controlled Ward boundaries to study the consequences of decentralized control over land-use regulation. I find that increasing zoning density reduces local house prices with an elasticity of -1.6%. Zoning is more restrictive in areas near Ward boundaries, and exogenous shifts in within-Ward homeownership share make zoning changes smaller. I then integrate locally-varying and endogenous zoning into a quantitative spatial model of city structure. Renters and homeowners sort into neighborhoods on heterogeneous location preferences, and vote on local zoning decisions---ignoring the spillover effects of agglomeration on other neighborhoods. I estimate a relatively small elasticity of amenities on density of 1.5%, with 80% of the spillover decaying within 3 city blocks. I also document evidence that the dis-amenities associated with density are more than twice as concentrated as the positive spillover effects, and estimate that centralizing land-use regulation could increase the average size of re-zonings by 5.6 p.p. These results emphasize the role that diffuse benefits and concentrated costs of density play in constrained housing supply and community opposition to development.
“The SoHo Effect or Manufacturing Decline? Untangling Theories of Industrial Conversions”
Former industrial districts in cities across the US are increasingly transitioning to commercial and residential use. I investigate two competing explanations: first, the so-called SoHo Effect, is ``taste-based'', emphasizing changes in preferences for pre-existing stock of real estate by both firms and households; second is a ``gentrification'' story that the nature of industrial production has changed causing industrial users to be outbid and pushed out by others. Exploiting Bartik-style shift-share demand shocks as instruments for industrial users’ demand for space, I find that the drop in industrial space is much greater than expected from the reduction in demand from industrial users---suggesting increasing bids from commercial and residential users. To explain these results, I construct a structural city model to incorporate heterogeneity in firm type, e.g., commercial and industrial, and model their changing preferences for real estate. I find that demand from neighboring residential and commercial areas spills over at a greater rate in cities where 1) land-use regulation is more restrictive, and 2) spillovers associated with density are more diffuse. Support for the ``gentrification'' explanation has implications for land-use policy and the disproportionate role that ``taste-based'' explanations play in popular discourse.
“Intra-City Variation in Zoning Restrictiveness”
Several popular surveys document wide variation across cities in the restrictiveness in land-use regulation, but there exists little information on intra-city variation. An MSA may have lax regulation on average, but limit it where it is needed most. I recover estimates of housing productivity at the neighborhood level by exploiting a measure of community opposition to development, building off of micro-evidence in support for land-use regulation in Chicago and New York City, and other data from alternative sources. I document significant evidence that the degree of within-city variation, across neighborhoods, rivals national variation as measured by implicit housing productivity. I explore the application of this data toward measuring how the effects of inelastic housing supply may be over or under-stated in various cities.