Taming the Growth Machine: The Long-Run Consequences of Federal Urban Planning Assistance (Job Market Paper, with Bressler)
Joint with Beau Bressler (UC Davis)
Abstract
We study how the federal Urban Planning Assistance Program, which subsidized growing
communities in the 1960s to hire urban planners to draft land-use plans, affected
housing supply. Using newly digitized records merged with panel data across
municipalities on housing and zoning outcomes, we exploit eligibility thresholds
and capacity to approve funds across state agencies to identify effects. Planning
assistance caused municipalities to build 20\% fewer housing units per decade over
the 50 years that followed. Regulatory innovation steered construction in assisted
areas away from apartments and toward larger single-family homes. Textual evidence
related to zoning and development politics further shows that, since the 1980s,
assisted communities have disincentivized housing supply by passing on development
costs to developers. These findings suggest that federal intervention in planning
helped institutionalize practices that complicate community growth, with
subsequent consequences for national housing affordability.