diff --git a/src/viewport.cpp b/src/viewport.cpp
--- a/src/viewport.cpp
+++ b/src/viewport.cpp
@@ -83,6 +83,7 @@
 #include "window_gui.h"
 #include "linkgraph/linkgraph_gui.h"
 #include "viewport_kdtree.h"
+#include "town_kdtree.h"
 #include "viewport_sprite_sorter.h"
 #include "bridge_map.h"
 #include "company_base.h"
@@ -1039,11 +1040,48 @@ static void DrawTileHighlightType(const 
 }
 
 /**
+ * Highlights tiles insede local authority of selected towns.
+ * @param *ti TileInfo Tile that is being drawn
+ */
+static void HighlightTownLocalAuthorityTiles(const TileInfo *ti)
+{
+	/* Going through cases in order of computational time. */
+
+	if (_town_local_authority_kdtree.Count() == 0) return;
+
+	/* Tile belongs to town regardless of distance from town. */
+	if (GetTileType(ti->tile) == MP_HOUSE) {
+		if (!Town::GetByTile(ti->tile)->show_zone) return;
+
+		DrawTileSelectionRect(ti, PALETTE_CRASH);
+		return;
+	}
+
+	/* If the closest town in the highlighted list is far, we can stop searching. */
+	TownID tid = _town_local_authority_kdtree.FindNearest(TileX(ti->tile), TileY(ti->tile));
+	Town *closest_highlighted_town = Town::Get(tid);
+
+	if (DistanceManhattan(ti->tile, closest_highlighted_town->xy) >= _settings_game.economy.dist_local_authority) return;
+
+	/* Tile is inside of the local autrhority distance of a highlighted town,
+	   but it is possible that a non-highlighted town is even closer. */
+	Town *closest_town = ClosestTownFromTile(ti->tile, _settings_game.economy.dist_local_authority);
+
+	if (closest_town->show_zone) {
+		DrawTileSelectionRect(ti, PALETTE_CRASH);
+	}
+
+}
+
+/**
  * Checks if the specified tile is selected and if so draws selection using correct selectionstyle.
  * @param *ti TileInfo Tile that is being drawn
  */
 static void DrawTileSelection(const TileInfo *ti)
 {
+	/* Highlight tiles insede local authority of selected towns. */
+	HighlightTownLocalAuthorityTiles(ti);
+
 	/* Draw a red error square? */
 	bool is_redsq = _thd.redsq == ti->tile;
 	if (is_redsq) DrawTileSelectionRect(ti, PALETTE_TILE_RED_PULSATING);