On March 20, the town of Darien, Connecticut shut down the city’s first coronavirus-testing site, after neighbors expressed opposition to the drive-through unit. Thankfully, a new testing site has since opened in the town, inside a local high school. It was a classic example, though, of local resistance to new construction—even, in this case, during a public-health emergency.
In a recent NBER working paper, I reported the results of a survey conducted in 2018, asking thousands of municipalities across America about their zoning laws. It’s no surprise that Darien and other municipalities in wealthy Fairfield County, Connecticut, have among the most extensive constraints—in particular, strict minimum-lot sizes.
It’s these kinds of zoning regulations that have contributed to making coastal real estate in cities like San Francisco and New York City so wildly expensive. The high prices make it harder for many individuals and small businesses to save money, which will, in turn, make it harder for them to weather the current stoppage in economic activity. If the United States had less-stringent zoning (as it did prior to landmark cases such as Euclid v. Ambler, decided in the 1920s), the fiscal stimulus and Federal Reserve liquidity measures might not need to be so massive.
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