The Economics of Zoning

John F. McDonald and Daniel P. McMillen

in The Oxford Handbook of Urban Economics and Planning

Published in print December 2011 | ISBN: 9780195380620
Published online September 2012 | | DOI:

Series: Oxford Handbooks

 The Economics of Zoning

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  • Urban, Rural, and Regional Economics


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The zoning movement in the United States began in the early twentieth century. Zoning is a form of regulation of the use of land that typically is an ordinance adopted by a municipal government. The zoning ordinance includes text and a zoning map that specifies the allowable uses of all parcels of land in the municipality. As such zoning is a topic that falls within the field of the economics of regulation. This article examines some aspects of the economics of zoning. It explores the nature of those regulations, examining who benefits from the regulations, and upon whom costs are imposed. It also discusses the effects of regulation on the allocation of resources. All these discussions and revelations are based upon relevant economic theory and empirical research. Most economists agree that there is a need for policies that mitigate negative external effects in urban areas, but they question whether zoning in its current versions is on balance good social and economic policy, the answer to which is not clear.

Keywords: zoning; economic policy; zoning ordinance; urban areas; regulation; resources

Article.  10592 words. 

Subjects: Economics ; Urban, Rural, and Regional Economics

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