Suburban growth controls and the price of new housing

The effect of Petaluma, California's growth control program on new house prices is examined by a comparative (quasi-experimental) design, using statistical controls. The difference in price increases between Petaluma and two comparison cities is calculated for houses of standard quality and for average actual houses in each city. It was found that prices of standard quality houses increased significantly more in Petaluma than in one of the comparison cities but not the other. A similar pattern was observed for actual houses. Reasons for the observed results and specific causes of the growth control effect are analyzed.