Spatial spillovers of land use regulation in the United States

Evidence of spatial dependence in land use regulatory levels was first found in Brueckner (1998) for California cities. Recent research has not incorporated this consideration despite the considerable consequences of the relationship. We seek to expand the empirical findings to a current, larger and more diverse data set for municipalities across the United States. Analyzing regulatory levels and their determinants from over 2,000 municipalities and 300 Metropolitan Statistical Areas, we find strong evidence of spatial dependence at the local level and aggregated metropolitan level. This suggests that political competition, rather than welfare maximization exclusively, may be influencing the level of regulations adopted.