John Hood writes today about the connection between property rights and economic vibrancy.
A new study posted at the National Bureau of Economic Research by Kyle Herkenhoff of the University of Minnesota, Lee Ohanian of UCLA, and Nobel Laureate Edward Prescott of the University of Arizona found that heavy regulations on land use increase the price of housing, thus chasing away investors, entrepreneurs, and workers from the states and localities that impose them.
The effects of rent control, rigid zoning laws, density and parking limits, eminent-domain abuse, and other land-use policies aren’t just negative for the jurisdictions that impose them. Herkenhoff, Ohanion, and Prescott found that the American economy as a whole suffers from the distortions created by differential regulations and housing costs. If just California and New York alone had kept their regulatory burdens the same since 1980, rather than increasingly them dramatically, the nation’s productivity would be substantially higher than it is.
Thus, decisions about property rights in North Carolina have very interesting implications.
