Zone defense: Why liberal cities build too few homes

Abstract

In this article, I investigate a puzzling feature of American urban politics: cities with more liberal residents tend to enact more restrictive zoning policies and permit fewer new housing units each year than similar conservative cities. To help explain this puzzle, I develop a formal model in which local governments regulate the size of their population to balance the benefits of agglomeration with the costs of congestion. To defend against congestion externalities imposed by new residents, cities enact zoning policies that undersupply housing relative to the social optimum. In liberal cities, where residents value the benefits of agglomeration the most, this undersupply of housing is the most severe.