By Ilya Somin | Reason
Fixing a calculation error in a leading academic article on the subject shows that zoning has a far bigger negative impact on the economy than was previously realized.
Economists and land-use scholars across the political spectrum have long known that restrictive zoning cuts off millions of people from housing and job opportunities. It is one of the biggest obstacles to increasing economic growth and promoting opportunity for the poor and disadvantaged. But new evidence suggests that the problem is even worse than previously thought.
The work of economists Chang-Tai Hsieh and Enrico Moretti is perhaps the most influential in the literature documenting the impact of zoning on economic growth. Recently, my George Mason University colleague, economist Bryan Caplan, discovered some significant calculation errors in their pathbreaking 2019 article “Housing Constraints and Spatial Misallocation.” Hsieh and Moretti have graciously acknowledged the mistake.