What in the Sam Hill are cows doing on Sand Hill Road?

Due to California's land regulations, they're grazing on the most expensive grass in the United States.

Top venture capitalists, tech giants, and exorbitant real estate prices in Menlo Park, California, reside next to a simple farm scene. The land-use rules that run rampant in the area stifle property development. This has damaged the Golden State and national economy, keeping the cows from being moved to less expensive meadows to make room for more buildings.

This is according to research by Regents Professor of Economics Edward C. Prescott, who is the director of the Center for the Advanced Study of Economics and 2004 Nobel Memorial Prize laureate in economics. Prescott's co-authors include University of California Professor of Economics Lee Ohanian, who is a senior fellow at the Hoover Institution, and economist Kyle Herkenhoff at the University of Minnesota.

In this The Wall Street Journal post credited to Ohanian and Prescott:

Relaxing land regulations could substantially improve America's economic performance by making housing and commercial development more affordable. If California rolled back its land rules to where they stood in 1980, our research estimates that the state's population could ultimately grow to 18 percent of the country. U.S. gross domestic product could permanently increase by about 2 percent, or $375 billion. If every state rolled back land regulations to 1980 levels, GDP could rise by as much as $1.8 trillion.

The academic paper on which The Wall Street Journal article (paywall) is based will publish in the Journal of Monetary Economics in February.