The Holdout Problem, Urban Sprawl, and Eminent Domain
Thomas J. Miceli
University of Connecticut - Department of Economics
C. F. Sirmans
Florida State University - Department of Risk Management, Insurance, Real Estate & Business Law
Developers attempting land assembly often face a potential holdout problem that raises the cost of development. To minimize this extra cost, developers will prefer land whose ownership is less dispersed. This creates a bias toward development at the urban fringe where average lot sizes are larger, resulting in urban sprawl. This paper examines the link between the holdout problem and urban sprawl and discusses possible remedies, including the use of eminent domain for urban redevelopment.
Number of Pages in PDF File: 22
Keywords: eminent domain, holdout problem, urban renewal, urban sprawl
JEL Classification: K11, R14, R52
Date posted: December 19, 2006
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