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Updated: Mar 20, 2022


Zoning confers an interest in the property of each landowner to those who control the political power of the locality. This allows municipalities to shape their residential environments and their property-tax base. Voters in most communities will accept developments that raise the value of their major personal asset, their homes. The efficiency of zoning thus depends on the transaction costs of making mutually advantageous trades between existing voters and development-minded landowners. High transactions costs of selling zoning plus the endowment effect that zoning confers probably create land-use patterns with excessively low densities in American metropolitan areas.

Keywords: Zoning, Land Use, Municipal Corporations, Exactions, Local Government, Tiebout models

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