Alan W. Evans

The Determination of the Price of Land

Received theories of the land market are inadequate, since they ignore the supply of land. It is known that occupiers of land are usually unwilling to sell at the market price but require compensation for being forced to move. Incorporating this as a theory of supply into land market theory allows us to explain or predict that (a) urban sprawl will occur, in the absence of planning controls, (b) a development gains tax will slow down the rate of development of land and increase its price, (c) whether land is owner occupied or occupied by tenants will affect its development, and (d) powers of compulsory purchase may be necessary for certain kinds of development but may cause social costs.

The land market and government intervention

Two kinds of government intervention in the land market are considered. The first is the control of development, of which the most studied form is zoning, but we also consider the designation of conservation areas and the effects of growth controls. Growth control may raise the price of land, allowing an infrastructure charge to be made or growth may be limited by charging impact fees. The second kind of intervention aims to increase the supply of land, either by direct action, as in the Netherlands, through compulsory purchase or eminent domain, or through the reallocation of land ownership as in land readjustment schemes.

Housing Densities and Consumer Choice

From 2001, the construction of flats and high-density developments increased in England and the building of houses declined. Does this indicate a change in taste or is it a result of government planning policies? In this paper, an analysis is made of the long-term effects of the policy of constraint which has existed for the past 50 years but the increase in density is identified as occurring primarily after new, revised, planning guidance was issued in England in 2000 which discouraged low-density development. To substantiate this, it is pointed out that the change which occurred in England did not occur in Scotland where guidance was not changed to encourage high-density residential development. The conclusion that the change is the result of planning policies and not of a change in taste is confirmed by surveys of the occupants of new high-rise developments in Leeds. The new flat-dwellers were predominantly young and childless and expressed the intention, in the near future, when they could, of moving out of the city centre and into houses. From recent changes in guidance by the new coalition government, it is expected that the construction of flats in England will fall back to earlier levels over the next few years.

The Private and Social Costs of Planning Delay

This paper examines planning delay and identifies the difficulty in establishing an appropriate definition and measure of delay. It then outlines an economic framework for the analysis of delay costs, distinguishing between private costs and the various elements of social cost. It shows that the costs of delay are contingent upon the restrictiveness of planning and should be assessed in relation to the benefits of planning control. Available estimates of delay cost are identified, but are shown to be deficient even as measures of the private cost of delay. Various suggestions are made for the improvement of existing approaches, but it is concluded that the assessment of private and social delay costs requires case-study research which distinguishes between property sectors, locations and different points in the cycle of property development.

On Minimum Rents: Part 2, A Modern Interpretation

The idea that there might be some minimum rent below which a land-owner would not let to any tenant was put forward by Marx, but with little supporting argument. In this paper, it is shown that the modern concepts and analysis of transaction costs and monitoring costs can explain why such a minimum rent might exist. Further, that risk and uncertainty, coupled with the fact that tenancies are usually for some years, also provide an explanation for the reluctance of land- and property-owners to let at minimal rents. Some empirical evidence is cited, particularly the substantial rents which have to be paid to lay telecommunication cables across private land.

On Minimum Rents: Part 1, Marx and Absolute Rent

Marx suggests that land would not be rented to a tenant at less than some minimum rent which he calls absolute rent. This concept and Marxs arguments are analysed in this paper. It has been argued by some that absolute rent in Marxian economics derives from the fact that investment in agriculture is lower so that the organic composition of capital is lower. It is argued here that the low organic composition of capital in the Marxian schema is rather a consequence of the existence of absolute rent, and this in turn results from the landlord-tenant relationship. Marx himself stressed that if land were owner-occupied absolute rent would not exist—that it is a consequence of the system of land tenure—but provides no explanation as to why it should have this consequence. In an associated paper, modern economic analysis is used to explain why minimum rents will occur.

The Economy of an Agglomeration: The Case of London

The development of London over the last 30 years is discussed in the context of Chinitzs seminal paper on major US agglomerations. The optimism originally voiced in the 1960s over the future of major urban agglomerations has not been borne out by experience, for a variety of reasons, some purely economic and some the outcome of policy. Even relative to comparable major European cities, London did worse than would be expected given its industrial structure. The Location of Offices Bureau and Office Development Permits have been discussed as a source of decentralisation of employment, but in fact had only limited effects. The reversal of the long decline in Central London employment shown up in the early 1980s by the Cordon Counts was to some degree a rearrangement of commuting patterns, and had in any case faltered by the late 1980s. The operation of the British land use planning system in constraining development in the South-east may also have discouraged firms from expanding in London. This factor may have continued to operate despite the winding-down of regional policy.

Optimal tax theory and the taxation of housing in the US and the UK

First, we survey recent research in the application of optimal tax theory to housing. This work suggests that the under-taxation of housing for owner occupation distorts investment so that owner occupiers are encouraged to over-invest in housing. Simulations of the US economy suggest that this is true there. But, the theoretical work excludes consideration of land and the simulations exclude consideration of taxes other than income taxes. These exclusions are important for the US and UK economies. In the US, the property tax is relatively high. We argue that excluding the property tax is wrong, so that, when the property tax is taken into account, owner occupied housing is not undertaxed in the US. In the UK, property taxes are relatively low but the cost of land has been increasing in real terms for forty years as a result of a policy of constraining land for development. The price of land for housing is now higher than elsewhere. Effectively, an implicit tax is paid by first time buyers which has reduced housing investment. When land is taken into account over-investment in housing is not encouraged in the UK either.

Inside out down under? Outer city unemployment in Australia

Abstract This paper discusses the causes of the outer city unemployment problem as suggested by various authors and shows that some of these causes can be ruled out on the basis of the evidence. Statistical studies of Melbourne and Sydney are compared with British studies. The paper also explains the exaggerated significance of the problem and the difficulty in separating the high level of outer city unemployment from high levels of rural unemployment.

A methodological note on the use of regression equations for the purpose of simulating change in urban location patterns

Econometric models are often used to simulate the effects of changes in an economy by altering the value(s) of some independent variable(s). It is shown in this paper that although this technique is usual in the study of nonspatial economies, the same methods used in urban spatial modelling may merely result in predictions which are due more to the properties of regression than to those of the urban economy. Work done by Kain and by Granfield in which they attempt to simulate racial desegregation is used to exemplify the argument.