Is the rent too high? Land ownership and monopoly power

Pricing power in real estate markets can reduce housing supply and redevelopment relative to the social optimum. We show how pricing power interacts with popular redevelopment subsidies and zoning regulations. Using building‐level rental income data from NYC, we find that increased concentration is correlated with increased rents. Finally, we use the model to estimate the first building‐level housing elasticity, finding that markups account for between one‐sixth and one‐third of rents in the city.