We think this is because small local gov'ts are more inclined to use housebuilding to attract new taxpayers. For small muni's, it is easier to attract new tax payers (they are closer), and their tax base is more susceptible to negative shocks (e.g., on local employment).

In line with this, we find that the effect is concentrated: *among jurisdictions which became physically much larger (area) *where tax base volatility was reduced *on permits where there is a large fiscal upside