The Seen and the Unseen: Wegmans, Manhattan, and Slow Growth

If my suspicion is correct, does anyone benefit from restrictions on growth?

What is interesting here is the assumption that higher property prices = benefit. Isn't this the same as assuming that nothing has value unless it's marketable?

There are certainly places where property values are higher because of significant restrictions on growth. Often adjacent to watershed land, where undeveloped land is typically the cheapest way to provide large quantities of high quality drinking water.

There are plenty of other places where property values of housing is higher because housing is segregated from commercial, industrial, and the like. And lower, where rational planning has not happened.

Without even getting into the non-financial aspects of planning.

Bryan,
I live in a 'Slum' area of Columbus, NM. Services are ancient, Unemployment is 70%, the nearest hospital is 35 miles away, Shopping an equal distance, with only four local restaurants. Property pricing is far below National average, and Housing is mostly inferior.

We have only one problem: People continue to move here! Our RV Parks fill every winter, but a disappointing number choose to stay Year-round. They are beginning to ruin the Scenery with their development projects. lgl

Slow-growth is zero-sum thinking. The earliest example I remember from growing up in the slums of upscale Danville, CA (SF Bay Area) was that they wanted to put a Costco in and extend a dead-end street past it to San Ramon, the town immediately south. We lived about 1 mile up that street. One way to get to San Ramon was to go through neighborhoods a couple miles to the east. The other was to cross the 680- freeway to the west. The people in the neighborhood to the east wanted the road to go through because they were tired of the traffic through their streets. The people near that dead-end street wanted to keep it dead-end. Nobody wanted the Costco (arguably the WalMart of its time). The battles were bitter.

10 years later (1997-ish), the Costco was thriving and everyone shopped there. The street went through and everyone used it to get to the southbound 680. Property values were up three to four fold. Everyone loved the Costco and some of my high school classmates were career employees there. And everyone was happy. But at the time, I was sure there would be a war.

Of course land in city centers is intrinsically more valuable than land in the exurbs because of density of services, culture, etc, but there is strong evidence, and I strongly believe, that growth restrictions, motivated by existing property holders, are the primary reason for elevated house prices. The obvious way to check is to do as Glaeser does in the paper Bryan cites: compare actual prices to their supply (construction+land) costs. In NYC, actual condo prices are more than twice what it would cost you to buy land and build a high-rise on it - how can that not be from building restrictions?

I live in Oregon and went to a talk by a Reed econ prof who was doing a econometric study of how urban planning in Portland, OR had effected property value. The results where very early in the study so i am not sure what the very end result was, but at the point where she gave her talk to a small group of econometric students she had found basically a small positive inpact on property value from the restrictions/planning or urban growth.

My personal experience with land use planning is that these restritions help creat livable communities.