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Abstract: Zoning regulations lowered aggregate growth by 36 percent (Hsieh and Moretti, 2019). If these regulations are so costly, why do they exist? We develop and solve a model in which fragmentation of zoning authority within a metro leads to regulations that are more restrictive than the social optimum. When zoning decisions are made locally, homeowners impose stricter regulations to mitigate local congestion externalities but fail to internalize the broader impact on metro-wide housing affordability. Empirically, we find that the Herfindahl-Hirschman Index of local governments explains 12 percent of the variation in zoning restrictiveness across U.S. metros. Using an instrumental variable approach, we show that municipal fragmentation, shaped at least 150 years ago, continues to drive stricter zoning and higher housing costs today. These findings suggest that centralizing zoning decisions at higher levels of government could alleviate housing affordability challenges.

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Abstract: This paper examines the impact of innovative startups on local real estate markets and business activity using nationwide datasets of patent applications, property-level repeat-sale transactions, and establishment-level business data. To address potential endogeneity in the site selection of startups, we leverage the quasi-random assignment of patent examiners with varying leniency as an instrumental variable. We find that patent-granted startups increase the annualized returns of nearby residential properties by 0.3 to 0.6 percentage points, and commercial properties and vacant land returns by approximately 0.5 percentage points. The effects are strongest for the first innovative startups in an area, with return increases of 1.5 to 2.1 percentage points, while subsequent startups generate additional cumulative but smaller marginal effects. We also find that indirect effects play a substantial role: successful startups stimulate nearby patenting activity and establishment growth within the same sector, and over time, also contribute to business formation in other sectors.

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Abstract: The Housing Choice Voucher program offers generous subsidies to low-income households for renting housing in the private market in the United States. However, only a fraction of program recipients successfully lease up a housing unit, often staying in high-poverty areas. This paper examines an important contributor to low lease-up rates especially in low-poverty areas: landlord discrimination against voucher holders. Using the universe of Craigslist rental listings, we identify listings containing voucherrelated keywords and analyze their attitude toward voucher holders. Among these listings, we find that many landlords seek out voucher holders in high-poverty, high-minority areas, but discriminatory listings are more frequent in low-poverty, low-minority areas. Using a difference-in-differences design, we provide evidence that statewide legislation prohibiting source-of-income discrimination can significantly reduce discriminatory rental listings, particularly in low-poverty, low-minority areas.