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Inclusionary Zoning in a Monocentric City

Abstract

To show how inclusionary zoning alters development, the author finds the most profitable housing design to build on vacant lots at each location in a monocentric city under different regulatory regimes. Section 1 sets up the model by specifying renter's preferences, geography and building parameters. Section 2 solves the developer's profit-maximization problem at each location under each regime. Finally, in Section 3, a numerical simulation confirms the effects predicted by theory and gives a picture of their magnitude.

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