We investigate the impact of land use regulation on housing vacancy rates. Using a 30-year panel dataset on land use regulation for 350 English Local Authorities (LAs) and addressing potential reverse causation and other endogeneity concerns, we find that tighter local planning constraints increase local housing vacancy rates: a one standard deviation increase in restrictiveness causes the local vacancy rate to increase by 0.9 percentage points (23%). The same increase in local restrictiveness also causes a 6.1% rise in commuting distances. The results underline the interdependence of local housing and Labour markets and the unintended adverse impact of more restrictive planning policies.

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Paul Cheshire, Christian A. L. Hilber and Hans R. A. Koster

1 February 2018

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Journal of Public Economics 158, pp.126-151, 2018

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DOI: 10.1016/j.jpubeco.2017.12.006

This Journal article is published under the centre's Urban programme.