Incentivizing Residential Land Development
18 Pages Posted: 12 Dec 2018
Date Written: November 20, 2018
The owners of undeveloped urban land are often blamed for restricting housing supply and thereby driving up house prices in the face of increasing demand. This paper shows how greater intra-city variation in amenity values reduces competition between developers and makes delaying development more attractive to landowners. Competition can be enhanced, and development of land accelerated, by reducing this variation. In particular, governments can increase housing supply in more desirable areas by taking actions that boost the amenity value of land in less desirable areas.
Keywords: real estate, housing supply, urban development, land banking, real options
JEL Classification: D25, O18, R31, R38
Suggested Citation: Suggested Citation