The Effect of Downzoning for Managing Residential Development and Density

David Newburn and Jeffrey Ferris

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This study analyzes the effect of a downzoning policy on both the rate and density of residential development using a difference-in-differences (DID) approach. Spatially explicit panel data on subdivisions are exploited to estimate average treatment effects for downzoned areas. Our results indicate that although downzoning does not significantly alter the rate of development, it does strongly affect the density of development. The lower density in agricultural zoning relative to the residential control area is only partly attributable to downzoning because, as our DID results indicate, it is important to control for baseline differences that exist prior to policy adoption.