Local urban growth controls and regional economic growth
- PDF / 238,417 Bytes
- 12 Pages / 439.37 x 666.142 pts Page_size
- 84 Downloads / 209 Views
Local urban growth controls and regional economic growth Boaz Nandwa · Laudo M. Ogura
Received: 20 November 2011 / Accepted: 29 May 2013 © Springer-Verlag Berlin Heidelberg 2013
Abstract Local land use regulations have been adopted to restrict population growth and urban sprawl in an attempt to prevent future problems like congestion, pollution, and loss of open space. However, when regulations become widespread in a region, it can be difficult for young workers and newcomers to find appropriate housing in the region. Because local governments may neglect the effects of their policies on the rest of the region, the resulting population size can be inefficient. We show that local adoption of housing regulations tends to over-restrict population growth when there are strong agglomeration economies in the regional production. On the other hand, when there is congestion in production, coordination among jurisdictions is undesirable if business interests are neglected. JEL Classification
R14 · R21 · R31 · R52
1 Introduction In fast-growing regions in the U.S., local jurisdictions have adopted land use regulations to restrict population growth and/or urban sprawl. These measures, known as urban growth controls (UGC), attempt to prevent future problems in the city like congestion in the use of infrastructure or government services, pollution, and loss of open
B. Nandwa Economic Policy & Research Center (EPRC), Dubai Economic Council (DEC), Dubai, UAE e-mail: [email protected] L. M. Ogura (B) Department of Economics, Grand Valley State University (GVSU), Grand Rapids, MI, USA e-mail: [email protected]
123
B. Nandwa, L. M. Ogura
space. Examples of control measures include urban growth boundaries, urban service boundaries, building permit restrictions, development fees, impact fees, large-lot zoning, and infrastructure or construction requirements (Brueckner 1999, and Glaeser et al. 2006a).1 Since UGCs improve the expectations on future living conditions in the city and restrain housing supply growth in the region, land and housing prices tend to increase in controlled places (Fischel 1990 provides empirical evidence; Brueckner 1999 discusses theoretical models; Green et al. 2005 shows that regulations reduces housing supply elasticity). With limited and expensive land available, housing development and population growth have been diverted to uncontrolled places (Levine 1999; Mayer and Sommerville, 2000). As a result, there have been increased commuting flows of workers from uncontrolled to controlled cities (Ogura 2005, 2010). If there are enough uncontrolled areas where new workers can find housing, regional production might not be significantly affected, except for the inefficiencies in commuting patterns (Sasaki 1998; Ogura 2005). However, as land use regulations can become widespread in some regions due to strategic behavior of local governments (Brueckner 1998), businesses might start to divert production to other regions where there is greater labor supply growth.2 Long-run effects of growth controls on produc
Data Loading...
