Efficient growth boundaries in the presence of population externalities and stochastic rents

► Landowners face a population externality that decreases urban rents. ► Growth controls induce landowners to convert earlier than planned, but do not affect their intensity choices. ► Growth controls raise the prices of both urban and undeveloped land. ► The regulator should slacken the growth boundary control once urban rents pass historically high levels. ► The regulator should also tighten the control when urban rents become volatile.