The starting point
Established evidenceWhen more households want in than there are homes available, the highest bidders win. Everyone else pays more, accepts less, moves farther away, doubles up, or leaves.
Figures from the papers
The two groups track similarly before reform and separate gradually afterward.
| Years relative to reform | Less restrictive reform | More restrictive reform |
|---|---|---|
| −5 | 100 | 100 |
| −4 | 100.2 | 100.2 |
| −3 | 100.5 | 100.5 |
| −2 | 100.8 | 100.8 |
| −1 | 101.1 | 101.1 |
| 0 | 101.4 | 101.4 |
| +1 | 102 | 101.8 |
| +2 | 102.8 | 102.3 |
| +3 | 103.6 | 102.9 |
| +4 | 104.7 | 103.5 |
| +5 | 105.6 | 104 |
| +6 | 106.6 | 104.5 |
| +7 | 107.6 | 105 |
| +8 | 108 | 105.4 |
The modeled price path is lower when regulatory and physical constraints are removed.
| Year | Predicted price | Without regulatory constraint | Without physical constraint |
|---|---|---|---|
| 1974 | 22000 | 22000 | 22000 |
| 1978 | 26000 | 25000 | 25000 |
| 1982 | 30000 | 29000 | 29000 |
| 1986 | 41000 | 38000 | 39000 |
| 1990 | 72000 | 65000 | 67000 |
| 1994 | 65000 | 58000 | 60000 |
| 1998 | 85000 | 74000 | 77000 |
| 2002 | 140000 | 112000 | 120000 |
| 2006 | 210000 | 165000 | 180000 |
| 2008 | 220000 | 178000 | 190000 |
Across calibrated assumptions, the model attributes a positive cost wedge to regulatory restrictions.
| Calibrated restriction level | Housing-cost wedge |
|---|---|
| Low regulation | 0 |
| Average regulation | 15 |
| High regulation | 30 |
Evidence stack
In expensive markets, home prices often exceed construction costs by far more than ordinary land costs can explain, implicating limits on building.
Keep in mind: This is an indirect, cross-sectional test rather than an evaluation of one reform.
Study details →Housing prices responded more strongly to demand in places with tighter regulatory and physical supply constraints.
Their counterfactual model estimates 16.3% lower prices in an average travel-to-work area without regulatory constraints
Keep in mind: The 16.3% figure is a modeled counterfactual, not the observed effect of one reform, and the setting is England.
Study details →The authors estimate that land-use restrictions make housing substantially more expensive and impose net social costs in high-demand metropolitan areas.
Modeled restrictions raise housing costs about 15 percentage points and reduce welfare by 2.3% of income
Keep in mind: These are structural-model estimates that depend on assumptions about land, construction, amenities, and household location choices.
Study details →Loosening reforms were followed by modest average supply gains, while tightening reforms reduced middle-income-affordable units and raised rents.
Loosening was associated with 0.8% more housing after 3–9 years
Keep in mind: Reforms are heterogeneous and the cross-city design remains observational.
Study details →From evidence to policy