Connor Hanna, University of Texas at Austin
As a contributing factor to the rising cost of living in Austin, the lack of affordable housing has increasingly become a subject of public concern. I argue that minimum lot sizes and excessive single-family zoning have artificially constrained the supply of housing and that this supply constraint is raising housing costs overall. I test this hypothesis using appraisal data from 2016 Travis County Land Database and the United States Census Bureau. These data allow me to estimate the elasticity of property market values with respect to a variety of characteristics, with a lower relative elasticity for lot sizes indicating that consumers’ preferences would be better served by densification. I also run regressions on single family permitting with respect to density to evaluate the presence of land scarcity and market value with respect to regulation strength to determine the impact of regulations on individual properties. My results offer empirical support to existing literature in finding that Austin is not facing land scarcity, that minimum lot restrictions alone have a direct positive impact on property market values, and that Austin consumers’ preferences may be better served by liberalizing the development process.
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