The Global E↵ects of Housing Policy

This paper studies the links between housing policies and aggregate energy use in the U.S. I connect two strands of literature on cities–that cities vary in their per capita energy use and in terms of housing supply elasticity–to measure the e↵ects of location choice and housing consumption on aggregate energy use. I build a dynamic spatial equilibrium model of U.S. metropolitan areas, accounting for local heterogeneity in housing demand and supply. Importantly, I decompose the supply restrictions into those naturally-occurring and those policy-induced. After matching the model to data on housing prices, construction activity, and building density, I conduct policy simulations to quantify the e↵ect of various housing policies on energy use. Results indicate that removing the federal tax subsidy for housing would result in a lower aggregate energy use, as would increasing land use regulations in high energy use locations. The primary channel is reducing the amount of housing consumed per person, and the secondary channel is in reallocating population from ine cient to more