Abstract

The Interstate Highway System (IHS) has profoundly influenced American cities. While highways have facilitated accessibility and spurred development, their impacts on local communities have prompted debates about their broader legacy. This paper examines how the availability of land mediates the IHS’s effects on the housing market, including housing and land prices. I find that highways drive population growth where land is abundant, and lower prices where it is scarce. Using an AMM-style model the paper quantifies the welfare and population effects of the IHS’s housing market channel, finding large, though heterogeneous, gains. These findings highlight the potential housing benefits of infrastructure projects when subsequent development is possible.