Commercial Land Use Regulation and Local Government Finance

Eric A. Hanushek
John M. Quigley
Published Date
May 1990
American Economic Review
pp. 176-180

Land use regulation in American cities is pervasive. Taken together, these rules probably represent the most significant market intervention undertaken by state and local governments.L and use regulation includes a wide variety of rules governing the physical location of economic activities within jurisdictions; regulations governing the design, height, or capital intensity of commercial and industrial property; rules regarding the minimum lot sizes for residential parcels, the number of bedrooms in new dwellings or other restrictions on residential density; and rules delineating developer responsibilities for infrastructure provided in newly subdivided areas. In this paper we investigate a new but increasingly popular form of land use control: limitations on the growth of commercial property.