Publications
Land Regulations, Housing Prices and Productivity
OCCASIONAL PAPER
Land costs are incorporated in most commercial activities. Hence, beyond the direct effects on housing and commercial property, measures that raise the price of land have a pervasive effect in raising costs throughout the economy.
An important by-product of regulatory-inflated land and housing prices is the consequential soaking up of savings that might otherwise be allocated to productive investment. A wind back of restrictions on land availability for home building and other urban uses would reduce housing prices and costs for land intensive urban activities as well as releasing savings for beneficial uses.