Zoning, Housing Prices and Neighbourhood Character

Peter Tulip discusses the effect of planning restrictions on housing costs and presents his new paper “Does high-rise development damage neighbourhood character?” The answer is “No”. The paper examines various examples of high-rise development. If these developments harmed neighbourhood character, as local residents often claim, nearby house prices should fall. But that does not happen. Instead, nearby house prices closely track the prices of houses in adjoining suburbs – both before and after the development. This implies that high-rise apartments have little effect on neighbourhood amenity. So regulations that restrict housing density increase the cost of housing unnecessarily.

Peter Tulip is Chief Economist at the Centre for Independent Studies. He previously worked in the Research Department of the Reserve Bank of Australia and before that at the Federal Reserve Board of Governors, the OECD and Commonwealth Treasury. His recent research focuses on housing and monetary policy.