Warding Off Development: Local Control, Housing Supply, and NIMBYs

Abstract

Local control of land-use regulation creates a not-in-my-backyard (NIMBY) problem that can suppress housing construction, contributing to rising prices and potentially slowing economic growth. I study how increased local control affects housing production by exploiting a common electoral reform—changing from “at-large” to “ward” elections for town council. These reforms, which are not typically motivated by housing markets, shrink each representative's constituency from the entire town to one ward. Results from a variety of difference-in-differences estimators show that this decentralization decreases housing units permitted by 20%, with similar effects on multi- and single-family permits. Effects are larger in whiter and higher-income towns.