Matthew Kahn writes about his research with Jonathan Zasloff on the impact of the California Coastal Commission on gentrification and housing prices. No surprise, it makes for expensive coastal housing:
My favorite story for the new facts we have generated is that the Coastal Boundary Zone represents a commitment device. Rich guys know that if they buy coastal property that guys like me won’t be able to build new homes near them without facing huge amounts of red tape. This barrier to entry means that they can live in paradise without having the “middle class” crowd around them. This regulation induced buffer zone is valuable to these folks and this bids up the price of existing homes within the Coastal Boundary Zone. So, the regulation both limits new housing supply and raises local housing demand because the community becomes more exclusive.
The punchline here is that thanks to the moderate weather, coastal Californians tend to have very low carbon emissions compared to the average American. All the improved insulation in the world can’t beat a house that just doesn’t need to be heated or cooled much. And if the coast were more densely populated, average household emissions would be even lower thanks to shorter and fewer drives.