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This paper considers the implications of increasing land supply constraints in the United States on urban demand. First, because shifts in demand are now capitalized more into the price of land, house prices in some metropolitan areas have grown increasingly unaffordable to typical households. This might have an effect on the fundamental character of such cities. Second, the effect of home owners’ financial interests as landowners on their decisions about what regulations or investments in their communities to support may become stronger. Third, researchers may now be able to better use land prices to make inferences about urban demand. However, interpreting real estate prices still is tricky.
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Document Type: Research Article

Affiliations: The Wharton School, University of Pennsylvania, 1465 Steinberg Hall-Dietrich Hall, 3620 Locust Walk, Philadelphia, PA 19104-6302., Email: [email protected]

Publication date: 2010-02-01

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