American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Estimating the Economic Value of Zoning Reform
American Economic Journal: Economic Policy
(pp. 235–74)
Abstract
We estimate the economic value of zoning reform in São Paulo, which altered maximum permitted construction along transportation corridors. Developers increased filings for multifamily construction in blocks affected by the reform, leading to more housing supply and lower housing prices in neighborhoods that allow more densification. Our equilibrium model of housing markets estimates an aggregate 1.6 percent increase in housing stock and a 0.4 percent reduction in prices, resulting in large housing wealth transfers from current to future homeowners. The reform produced welfare gains of 0.65 percent of city GDP, mostly due to developer profits and consumer gains from the newly built environment.Citation
Anagol, Santosh, Fernando Ferreira, and Jonah Rexer. 2026. "Estimating the Economic Value of Zoning Reform." American Economic Journal: Economic Policy 18 (3): 235–74. DOI: 10.1257/pol.20230542Additional Materials
JEL Classification
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- R11 Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
- R31 Housing Supply and Markets
- R41 Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
- R52 Regional Government Analysis: Land Use and Other Regulations