Zoning and Industrial Land Values: The Case of Philadelphia

This paper examines the market effects of zoning. Using the hedonic framework, we perform an empirical analysis that shows that lots zoned for industrial use in our study area are associated with a 58% price discount. The paper highlights the outcome of static zoning policies in a dynamic world. As the demand for industrial land in Philadelphia declined (resulting in vacancies), prices fell, but zoning was slow to adjust, therefore land conversion did not occur to re‐equilibrate.