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Land use reform

TagLast edit: 5 Jun 2021 8:56 UTC by EA Wiki assistant

Land use reform describes attempts to change legislation regulating the construction of dense housing in urban areas.

The problem

Laws at the local level in the United States and many other countries impose strict limits on how much total floor area can be built on a plot of land. Such zoning laws constitute a major obstacle to the construction of dense housing. The resulting increase in housing prices reduces economic efficiency by creating significant deadweight loss; increases inequality by transferring wealth from renters to landowners; and reduces both wages and total economic output by preventing workers from relocating where they can be most productive.

The effects of zoning laws on housing prices can be estimated by comparing the sale price of housing to the associated costs of land and construction (Glaser, Gyourko & Saks 2005). Open Philanthropy has combined these estimates with rent data and some additional assumptions to conclude that the aggregate “tax” on renters in five large metropolitan areas amounts to over $100 billion in deadweight loss per year (Open Philanthropy 2015: sect. 1).

A study by economists Chang-Tai Hsieh and Enrico Moretti examines the costs resulting from reduced flow of workers to more productive regions within the United States as a result of rising housing prices. The authors conclude that land use restrictions depress annual U.S. wages by $1.27 trillion and output by $1.95 trillion (Hsieh & Moretti 2019).

If land use restrictions create these problems, why do they persist? In part, the costs of restricting land use in a given location are incurred by workers who would benefit from moving to that location, and who as such do not yet live there. Since restrictions are created at the local level, they are insensitive to the interests of these workers, who do not vote in those jurisdictions. Other costs of restricting land use—such as reduced economic output—are dispersed across society as a whole. Public choice theory explains why governments neglect these costs and instead focus on the concentrated benefits to landowners—even if, in the aggregate, the costs vastly outweigh the benefits.

Possible solutions

Open Philanthropy and 80,000 Hours have proposed a number of solutions to the problems caused by land use restrictions, which are quoted below.

Policy options

Promising options open to policymakers include the following (Open Philanthropy 2015: sect. 2.1):

Funding options

Promising options open to funders include the following (Open Philanthropy 2015: sect. 2.2):

Open Philanthropy has explored some of these and other funding options; between 2015 and 2020, it granted over USD 6.75 million to organizations working on land use reform (Open Philanthropy 2021).

Career options

Promising career options include the following (Wiblin 2015):

Direct work options

Promising direct work options include the following (Wiblin 2015):

Bibliography

Berger, Alexander (2014a) A conversation with Stephen Smith, GiveWell, March 13.

Berger, Alexander (2014b) A conversation with Gabriel Metcalf, Open Philanthropy, March 31.

Berger, Alexander (2014c) A conversation with David Schleicher, Open Philanthropy, May 15.

Glaeser, Edward L., Joseph Gyourko & Raven Saks (2005) Why is Manhattan so expensive? Regulation and the rise in housing prices, Journal of Law and Economics, vol. 48, pp. 331–369.

Glaeser, Edward L. & Joseph Gyourko (2008) Rethinking Federal Housing Policy, Washington, D.C.: The AEI Press.

Hsieh, Chang-Tai & Enrico Moretti (2017) How local housing regulations smother the U.S. economy, The New York Times, September 6.

Hsieh, Chang Tai & Enrico Moretti (2019) Housing constraints and spatial misallocation, American Economic Journal: Macroeconomics, vol. 11, pp. 1–39.

Kaufman, Jeff (2019) Make more land, LessWrong, October 16.

Open philanthropy (2015) Land use reform, Open Philanthropy, March.

Open Philanthropy (2021) Grants database, Open Philanthropy.

Wiblin, Robert (2016) Land use reform, 80,000 Hours, April 14.

For­eign Af­fairs Piece on Land Use Reform

bryanschonfeld14 Sep 2020 13:12 UTC
11 points
4 comments1 min readEA link

Open Philan­thropy Staff: Sugges­tions for In­di­vi­d­ual Donors (2020)

Aaron Gertler2 Dec 2020 12:08 UTC
11 points
1 comment7 min readEA link
(www.openphilanthropy.org)

Open New York is Fundrais­ing!

evelynciara16 Jan 2020 21:45 UTC
−2 points
0 comments1 min readEA link
(mailchi.mp)

Why We Need Abun­dant Housing

leonoraahla29 Apr 2021 7:45 UTC
4 points
3 comments3 min readEA link
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