coastal houses in packed neighborhood

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Land-Use Restrictions

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Although land-use regulations can lower real estate prices by imposing costs on property owners, they may also increase property values by restricting development and generating valuable amenities, such as ocean views, coastal access, and wildlife habitat. To better understand the tradeoffs of these regulations, The Productive Landscapes Group at emLab is studying the effects of the California Coastal Act--one of the nation’s most stringent regulations on land-use and coastal access--on the price and rental income of multifamily housing units in Southern California. 

We have developed a method that uses data on the multifamily housing market to isolate several effects of development restrictions on properties within the Coastal Zone, including an own-lot effect (the price change due to restrictions on the property), a neighbor effect (the price change due to restrictions on immediate neighbors), and an external effect (the price change due to amenities generated by the regulation of all properties within the Coastal Zone). Our results suggest that the Coastal Act regulations raises the value of multifamily housing units located inside the Coastal Zone, and also provides spillover benefits to homes outside the regulated area.