Driving Restrictions and Housing Prices: Evidence from the First Bridge and Tunnel Restriction in Chongqing, China

This paper examines the impact of bridge and tunnel driving restrictions in Chongqing, China on urban housing prices. Using a spatial difference-in-difference method, it finds a 2.7 per cent decrease in housing prices within a 7 km radius of restricted areas due to higher commuting costs caused by driving restrictions. This decline is attributed to an increase in supply and a decrease in demand for nearby second-hand houses. Improving public transport, such as light rail and buses, can mitigate the rising commuting expenses resulting from driving restrictions, thereby alleviating the negative effects on housing prices near restricted areas.