An interesting paper (gated) by Matthew Kahn and Jonathan Zasloff focuses on the effects that California’s Coastal Boundary Zone regulations had on housing prices in the area. The authors find (unsurprisingly) that a house located within the Boundary Zone sells for a substantial price premium over a similar house located just over the boundary. This is a fantastic support for the seemingly intuitive but hotly contested thesis that land use regulations are a determinant of high house prices.
This paper’s conclusions highlight an important contradiction between two major planks of progressive policy: environmental protection and affordable housing. The Coastal Boundary Zone and the commission that administers it were created in the 1970′s to protect California’s natural coast. The Coastal Commission takes this job seriously and has done it admirably, fighting interests like the Hearst Estate and David Geffento protect against major development. Unfortunately, as the paper finds, the result of this smashing success are persistently high house prices across the region.