The effect of zoning on housing construction

This paper examines whether a more restrictive zoning ordinance actually reduces construction of new housing. This may seem at first to be a trivial issue, since why else would a zoning board make the ordinance more restrictive. However, it is possible for landowners to circumvent the zoning law. For example, they can subdivide their land before the zoning change occurs. In addition, they can bargain with the local zoning officials and offer side payments, also known as exactions, for the right to develop their land. This paper examines a famous case of agricultural downzoning in McHenry County, Illinois. It finds that although the number of building permits issued did not fall immediately, in the long run the number of permits issued by the county was significantly reduced. This suggests that developers were able to anticipate the zoning change and subdivide their land before it occurred. (C) 1997 Academic Press.

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