Diego Daruich from the University of Southern California will present "Zoning Out Opportunities: The Intergenerational Impact of Housing Supply Restrictions"

Abstract: This paper evaluates the welfare effects of housing supply restrictions through the lens of an equilibrium model that incorporates neighborhood effects on child development. We develop a general equilibrium overlapping-generations framework with endogenous housing supply, neighborhood quality, location choice, and skill formation. Housing regulations are modeled as convex construction costs that limit supply and raise prices. The model is estimated using U.S. data and validated against reduced-form evidence from the Moving to Opportunity experiment.

Reducing housing regulations to levels observed in less restrictive U.S. cities generates substantial welfare gains. Intergenerational dynamics are central to this result: when parental altruism is excluded from welfare calculations, gains for adults alive at the time of reform fall by a factor of forty, and political opposition rises from 17 to 52 percent. These findings suggest that standard frameworks abstracting from intergenerational linkages substantially understate the benefits of housing deregulation.