Growth management and housing prices: The case of Portland, Oregon

Portland, Oregon, is well known for its relatively unique urban growth boun dary (UGB), a very tight form of zoning designed to control sprawl. The UGB has recently been criticized for raising housing prices. From a theoretica l perspective, the UGB will pat upward pressure oil: land and thus housing prices, but the magnitude of this effect is uncertain. Increasing density s hould substitute for higher land prices, partially offsetting any reduction irt the supply of housing. In addition, at any given moment, speculative f actors influence housing price levels in bull markets such as the one Portl and has been experiencing. This article presents an econometric analysis as sessing these conflicting effects. We find the UGB has created upward press ure on housing prices, but the effect is relatively small in magnitude. (JE L R21, R52).