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Research Projects

STATUS: Complete YEAR: 2019 TOPIC AREA: Public transit, land use, and urban mobility Transportation planning, policy, and finance CENTER: PSR

Zoning and the Density of Urban Development

Project Summary

Project number: PSR-19-08
Funding source: Caltrans
Contract number: 65A0674 TO 015
Funding amount: $35,000
Performance period: 8/1/2019 to 7/31/2020

Project description

We build a quantitative general equilibrium model of residence and employment choices under municipal density limits. Developers decide where to build, businesses decide where to offer jobs, and workers decide where to live and work given exogenous location characteristics, transport infrastructure, and zoning restrictions. We use employment, real estate, and commuting data to identify effective density restrictions for 3,917 Census tracts in the Los Angeles metropolitan area. We then compute two counterfactual scenarios. In the first, zoning restrictions on density are relaxed to the level of downtown L.A. in all urban tracts. In the second, massive improvements to transport infrastructure eliminate congestion-related delays. Each change yields large welfare gains. The first scenario leads to larger increases in output and much larger decreases in real estate prices, while the second scenario brings larger reductions in average commuting time.


Andrii Parkhomenko
Assistant Professor, Department of Finance and Business Economics; Marshall School of Business
Hoffman Hall, Office 702, 701 Exposition Blvd.
Los Angeles, CA 90089
United States
[email protected]