Land　resources　are　crucial　yet　limited　inputs　in　economic　activities,　with　significant　implications　for　both　economic　development　and　public　sector　behaviour.　This　study　investigates　how　land　resource　supply　affects　local　government　actions,　using　the　place-biased　land　supply　policy　(PBLP)　introduced　in　2004　as　a　quasi-natural　experiment.　Through　a　propensity　score　matching　and　difference-in-differences　(PSM-DID)　approach,　this　study　finds　that　cities　facing　land　supply　restrictions　under　PBLP　experienced　slower　GDP　growth　alongside　higher　pollutant　emissions.　These　effects　remain　robust　across　alternative　variable　measures,　accounting　for　other　policies,　and　varying　matching　techniques.　The　slowdown　in　economic　growth　is　primarily　driven　by　reduced　fixed　assets　and　foreign　investment,　prompting　local　governments　to　relax　environmental　regulations　to　boost　short-term　growth.　These　findings　highlight　the　unintended　consequences　of　administrative　land　policies　on　social　welfare,　revealing　the　complex　dynamics　between　land　supply,　government　behaviour,　and　socio-economic　outcomes.　©　2024　Informa　UK　Limited,　trading　as　Taylor　&　Francis　Group.