Local regulation and land-use change: The effects of wetlands bylaws in Massachusetts

As urban areas across the U.S. grow, open-space lands providing wildlife habitat and ecosystem services are lost to development. In response, many communities have experimented with local regulations to encourage land conservation, but little is known about their effects on land-use change or housing supply. Wetlands protection bylaws are a potentially important and highly controversial form of local land-use regulation in Massachusetts. This paper uses conditional variation in the timing of adoption of these bylaws across communities to analyze their effects on rates of land-use change and housing growth from 1971 to 1999. We find that bylaws significantly reduced the rate of land conversion from open space to residential uses in communities where they were enacted, but did not significantly reduce growth in housing units, housing values or housing density in those communities. We do not find strong evidence that land-use conversion was displaced to neighboring communities, but supply constraints may have encouraged additional development at alternate sites within communities or additional higher density housing development in communities where it was allowed.