Analysis of the effects of local land use legislation and monetary policy on real estate development

Countless studies have been conducted to determine how the real estate market reacts to the economy. The most accurate studies contemplate both macroeconomic and microeconomic variables simultaneously. In analyzing real estate markets, both monetary policy and regional factors must be examined to obtain an accurate portrayal of both national and local trends. One regional factor that has affected all real estate markets, especially in the southern states, is local land use legislation. Due to rapid increases in population, various states have enacted growth management policies to ensure stable expansion within their regions. This study utilizes data for Broward County, Florida, to assess the impact of land use legislation on the local real estate market in comparison to macroeconomic variables. The empirical results clearly demonstrate that legislation can exert a greater influence on local housing market activity during certain periods than can macroeconomic factors such as interest rates.