The stringency of urban regulation: evidence from Chile
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Date
2021
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Abstract
This work explores the stringency of urban regulation in the Greater Santiago area, measured as the elasticity between property prices and two regulatory variables: maximum allowed FAR and height. A high stringency reveals that regulated levels are far below free-market levels, while a low stringency indi- cates that the two values are closer. I use a rich panel dataset that contains different regulatory variables over time, at a territorially disaggregated level for an important part of the city. I join this database to used housing transaction prices between 2007 and 2018. My results show that the strigency is not statistically different from zero in Santiago. This indicates that construction levels are probably close to what would have been in the absence of regulation. Additionally, when I study heterogeneities within the city, I do not find the stringency changes with accessibility. However, I find that high socioeconomic neighborhoods and those with stricter baseline regulatory variables have higher levels of stringency, although the last is small in magnitude. These results, however, must be interpreted with caution, considering that the analysis is centered on used housing prices –assuming that all could be regarded as land for densification–and not only in land transactions.
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Tesis (Master in Public Policy)--Pontificia Universidad Católica de Chile, 2021