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June 2004

Study Of Residential Land-Use Regulation

The Zell/Lurie Real Estate Center has embarked on a large-scale research study of land-use regulation in the United States, co-directed by Wharton professors Joseph Gyourko and Anita Summers. Currently, information about land-use regulations is available at the local level, but there is no centralized location for comparative data. The mission in this study is to provide such a central location, the first to be developed, and to be a center for the analyses of the data Stated differently, we wish to replace anecdotal information with systematic information.

There are several objectives that will be served by the provision of readily accessible data on the nature and severity of land-use regulations in the U.S. - data which will involve extensive collection efforts:

  1. Developers and local planning officials will be able to assess the relative severity of the regulatory climate in the communities of interest to them.

  2. Research by scholars in the fields of economics, sociology, political science, and law will be able to analyze topics of interest to them that influence land-use regulations, or are influenced by them, with data that are not now available.

  3. It will be possible to track changes in land-use regulations in different types of communities, if, as planned, the compilation of the data will be done, every five years.
BACKGROUND
The origins of this project go back to 1989, when Professors Peter Linneman and Anita Summers conducted a survey on land-use regulations of the 60 largest central cities, and a stratified sample of about 2500 suburbs, resulting in a data base made available to all those who requested it. The researchers used it for analyses of population and employment changes within the 60 largest metropolitan areas. Many people have used the data base, and many have pointed out that it is now outdated- and asked when another survey will be forthcoming! Hence, the plans for the current survey and for one every five years thereafter.

CURRENT PROJECT
An extensive data base will be amassed for a sample of over 10,000 municipalities and counties. Relevant socioeconomic profiles and housing data will be drawn from the 2000 Census. There will be data from the survey on the nature of the limits on residential building, changes in the cost of lot development, length of time to complete reviews and approvals, and the ease of zoning and permit approval. A unique data set will be built up to calibrate the extent of community pressure from votes on open space ballot initiatives, membership in land conservation organizations and other sources. For each state, a profile of the regulatory bent of the State Legislature and of the State Supreme Court will be developed.

Many econometric analyses of these data are planned. What are the effects of variations in regulatory severity among the municipalities on employment and population shifts, on housing costs, and on the tradeoff between economically efficient allocation of space and public health benefits made by different communities? On the other side, the study will examine the effects of population and employment characteristics, environmental pressure, and state legislative and judicial actions on regulatory severity.

The nationwide survey will be supplemented by a detailed - every community, not just a sample - survey of the Philadelphia metropolitan area (five counties in Pennsylvania, four in New Jersey). This will be a pilot study, which will be useful in several ways: Philadelphia is a prototype of a large metropolitan area; the completeness of the data will enable very high quality econometric analyses; and, because the Zell/Lurie Real Estate Center is located in Philadelphia, its faculty has a particularly close knowledge of its functioning.

CURRENT STATUS
The initial exploratory steps in this project have been funded by the Center's Research Sponsors. The researchers have developed the survey instrument, located the appropriately matching Census data, reviewed the relevant literature, examined other local government regulatory surveys on land-use, identified the data for calibrating community environmental pressure, and have started the state legislative and judicial profiles. The researchers are also seeking additional funding from foundations and other sources for this very substantial project - which, if all goes well, will be one of the signature activities of the Zell/Lurie Real Estate Center.
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