September
22
2005
Job Creation and Housing Construction: Constraints on Metropolitan Area Employment Growth
Author Raven E. Saks, an economist from the Federal Reserve Board, finds that in places with relatively few barriers to construction, an increase in housing demand leads to a large number of new housing units and only a moderate increase in housing prices. In contrast, for an equal demand shock, places with more regulation experience a 17 percent smaller expansion of the housing stock and almost double the increase in housing prices.