Why Do We Have Urban Density Controls?

Almost all urban land use controls reduce permitted densities. This article analyzes restrictions on residential densities in a conventional model of density–distance functions. Density controls force development to extend farther than in competitive equilibrium, thus increasing commuting distances and dwelling costs. Residents benefit if, as is likely, they prefer lower densities than in competitive equilibrium. But there is a limit to the extra commuting and housing costs that nevertheless make residents better off. Theoretical and numerical analyses are presented to show that likely parameter values almost certainly result in reductions in residents' welfare.