Land Use Restrictions and the Australian Housing Policy Debate Peter Tulip August 2024

This uses the most popular approach, the difference between sale prices and the marginal cost of supply, which Glaeser and Gyourko call the “zoning tax”. [...] The public responses are difficult to understand given the very clear effect of supply and demand on the cost of housing. [...] Note that the same close relationship is evident in Canada and the United States That the public does not see increased supply as the remedy is a puzzle and a major obstacle to better policy. [...] An increase in the dwelling stock of about 10 to 15 per cent, in addition to what would normally be supplied, might be needed to eliminate the shortage estimates in Table 1, assuming an elasticity of housing demand of about -0.4 (as estimated by Saunders and Tulip and Abelson and Joyeux). [...] We have “left-NIMBYs” but they lack influence outside a few niches, in particular the Greens Party (which controls the balance of power in some legislatures), the social housing lobby and the planning profession.