Providing Incentives for Efficient Land Assembly
30 Pages Posted: 20 Sep 2007 Last revised: 21 Jun 2010
Date Written: April 13, 2010
When urban renewal requires land assembly, owners who hold out may delay or prevent efficient redevelopment. Governments that use eminent domain to take such properties might cause socially inefficient redevelopment if they underestimate the values of these properties. None of the recent proposals for dealing with land assembly is fully efficient, and many fail to ensure that owners receive full compensation for their properties. We describe two mechanisms that yield efficient land assembly, and we assess their attractiveness relative to eminent domain and other, previously proposed solutions.
Keywords: land assembly, eminent domain, Clarke mechanism, self-assessment
JEL Classification: K11, R52
Suggested Citation: Suggested Citation