I am an Assistant Professor of Finance and Real Estate at the University of Colorado Boulder (Leeds School of Business). My research interests are Urban and Real Estate Economics, Public Economics, and Industrial Organization.
Email: jaehee.song@colorado.edu
I construct a new nationwide dataset to measure the stringency of residential zoning in the U.S. and use it to examine the effects of zoning on housing prices and demographic sorting. First, I develop and apply a structural break detection algorithm to infer minimum lot size regulations from property tax records. These minimum lot size estimates cover 16,217 local jurisdictions and are geographically detailed, capturing both across-jurisdiction and within-jurisdiction variations in zoning stringency. I then use this constructed data and a spatial discontinuity design at municipality borders to evaluate the impact of the regulations in housing markets. I find that a larger minimum lot size increases home prices and rents. For example, doubling the minimum lot size increases sales prices by 10 percent and rents by 6 percent. I also find that neighborhoods with restrictive zoning disproportionately attract high-income white homeowners, intensifying residential segregation.
Why Zoning is Too Restrictive
with Jack Favilukis
Zoning restrictions lowered aggregate growth by 36 percent (Hsieh and Moretti, 2019). If these restrictions are so costly, why do they exist? We propose a novel theory for why zoning is more stringent than the social optimum: the more zoning authorities a metro is fragmented into, the more restrictive zoning is in the metro. When zoning decisions are made locally, voters restrict development to avoid local congestion externalities, but fail to internalize worsened metro-wide housing affordability. Empirically, the HHI of local governments within a metro alone explains 12 percent of zoning variation across the U.S. Using lagged HHI in 1900 as an instrument, we show that fragmentation of zoning authorities increases zoning stringency and housing costs. Our results provide clear policy advice --- zoning decisions should be made globally. Indeed, facing housing affordability crises, several states and nations have begun to adopt global zoning reforms.
The Housing Choice Voucher program offers generous subsidies to low-income households for renting housing in the private market in the United States. However, only a fraction of program recipients successfully lease up a housing unit, often staying in high-poverty areas. This paper examines an important contributor to low lease-up rates especially in low-poverty areas: landlord discrimination against voucher holders. Using the universe of Craigslist rental listings, we identify listings containing voucher-related keywords and analyze their attitude toward voucher holders. Among these listings, we find that many landlords seek out voucher holders in high-poverty, high-minority areas, but discriminatory listings are more frequent in low-poverty, low-minority areas. Using a difference-in-differences design, we provide evidence that statewide legislation prohibiting source-of-income discrimination can significantly reduce discriminatory rental listings, particularly in low-poverty, low-minority areas.