Regulating the Growth Machine: Campaign Contributions, Zoning Environments, and Housing Supply in U.S. Cities

Money in politics is the subject of great debate at every level of government, yet it has principally been studied at the federal level in the U.S. In this paper, we describe and leverage a novel data set of over 3 million municipal election campaign contributions in U.S. cities from the past several decades. We focus on real estate industry contributions and their influence in the context of the acute housing affordability crisis across many American municipalities. Using generalized difference-in-differences panel designs, we find that increased contributions from real estate development groups lead to greater permitting of multi-family housing, while effects on single-family housing are more mixed. This relationship varies with the local regulatory environment. In cities with above-median zoning regulation, donations are associated with increases in multi-family permitting; in less regulated cities, donations are not associated with such increases in multi-family housing permits. These effects are real but modest relative to the existing housing stock of large, heavily regulated cities. Together, our findings suggest that developer campaign donations are influential, particularly because of a regulatory system that forces housing supply decisions through discretionary political channels.