Land use regulation and intraregional population-employment interaction

Land use regulations often delay residential development processes and increase the development costs, although they contribute to addressing market failures and realizing a well-organized urban spatial structure. Raising barriers to development can prevent households from moving in response to either job relocations or job growth at certain locations in a timely manner through restrictions in the local housing supply. This situation may also result in longer commuting distances, times, and costs, as well as greater spatial mismatches. To examine the possible adverse effects of the regulations, this study analyzes how intraregional population-employment interactions vary across metropolitan areas that substantially differ in the restrictiveness of land use regulations. First, an exploratory correlation analysis of 40 large U.S. metropolitan areas reveals that highly regulated regions, particularly those with lengthy approval processes, are likely to show a lower correlation between census tract-level population and employment changes and an increase in mean commuting time between 1990 and 2000. Secondly, regression analysis suggests that the lower correlation in highly regulated metropolitan areas could be attributed to the limited responsiveness of the population to employment redistribution within the regions.