Land, money and politics: Essays on government intervention in housing markets

This dissertation explores the causes and effects of government intervention in two critical elements of housing markets: land use and finance. Essay 1 explores the determinants of zoning restrictions on multifamily housing in Massachusetts. Using a new and unusually rich dataset on land use regulations in 186 communities, I test several hypotheses about why municipalities restrict multifamily housing. The results reflect two distinct waves of zoning, each of which was shaped by different determinants. Under regulations adopted in the 1940s and 1950s, communities with higher density housing, higher land values and governed by a city council were less restrictive. During the second wave of regulations, beginning in the 1970s, the use of special permits increased and more affluent communities were more restrictive.; Essay 2 also pursues the political economy of housing markets, testing for political manipulation in the distribution of subsidized mortgage loans in Mexico during the 1990s. I develop a baseline model of loan allocation across states as a function of housing need, program eligibility and administrative capacity. I add measures of political competitiveness to test for evidence of politically strategic allocation. Results suggest that the two largest lenders generally allocated loans according to their eligibility criteria, granting more loans to states with more income- and employment-eligible households and poorer quality housing. Somewhat surprisingly, the tests for political manipulation yield results small in magnitude and weak in statistical significance.; The third essay returns to the topic of land use regulation and investigates the effects of two common types of regulation on single-family housing prices in the 40 largest U.S. metropolitan areas during the 1990s. Previous empirical studies in this field have been hampered by the difficulty of measuring zoning, and have generally focused on regulatory stringency rather than type. I develop a proxy measure of regulation, the ratio of multifamily units to total units permitted, present theoretical predictions and empirical analysis on the housing price effects of two regulatory regimes. The regression results suggest that metropolitan areas characterized by exclusionary zoning have higher housing prices but do not provide evidence that urban containment has driven up prices.