Cheshire, Paul and Hilber, Christian A. L. (2007): Office Space Supply Restrictions in Britain: The Political Economy of Market Revenge.
Download (241Kb) | Preview
Office space in Britain is the most expensive in the world and regulatory constraints are the obvious explanation. We estimate the ‘regulatory tax’ for 14 British office locations from 1961 to 2005. These are orders of magnitude greater than estimates for Manhattan condominiums or office space in continental Europe. Exploiting the panel data, we provide strong support for our hypothesis that the regulatory tax varies according to whether an area is controlled by business interests or residents. Our results imply that the cost of the 1990 change converting commercial property taxes from a local to a national basis – transparently removing any fiscal incentive to permit local development – exceeded any plausible rise in local property taxes.
|Item Type:||MPRA Paper|
|Institution:||London School of Economics|
|Original Title:||Office Space Supply Restrictions in Britain: The Political Economy of Market Revenge|
|Keywords:||Land use regulation; regulatory costs; business taxation; office markets|
|Subjects:||H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q1 - Agriculture > Q15 - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R5 - Regional Government Analysis > R52 - Land Use and Other Regulations
|Depositing User:||Christian A. L. Hilber|
|Date Deposited:||25. Oct 2007|
|Last Modified:||12. Feb 2013 06:38|
Barker, K. (2003) Review of Housing Supply: Securing our Future Housing Needs: Interim Report – Analysis, London: HMSO. Barker, K. (2004) Review of Housing Supply: Final Report - Recommendations, London: HMSO. Barker, K. (2006a) Barker Review of Land Use Planning; Interim Report - Analysis, London: HMSO. Barker, K. (2006b) Barker Review of Land Use Planning; Final Report - Recommendations, London: HMSO. Bertaud, A. and J.K. Brueckner (2005) ‘Analyzing building height restrictions: predicted impacts and welfare costs’, Regional Science and Urban Economics, 35 (2), 109-125. Brown, G.R. and G.A. Matysiak (2000) Real Estate Investment: A Capital Market Approach, London: FT Prentice Hall. Brueckner, J.K. (2000) ‘Urban Sprawl: Diagnosis and Remedies’, International Regional Science Review, 23, 160-71. CBRE (2004 & 2005) Global Market Rents, Los Angeles: CB Richard Ellis Cheshire, P.C. (2005) ‘Unpriced Regulatory Risk and the Competition of Rules: unconsidered implications of land use planning’, Journal of Property Research, 22, 2/3, 225-244. Cheshire, P. and S. Sheppard (1986) The Economic Consequences of the British Land Use Planning System: a Pilot Study, Final Report to ESRC. Cheshire, P.C., and S. Sheppard (2002) 'Welfare Economics of Land Use Regulation', Journal of Urban Economics, 52, 242-69. Cheshire, P.C. and S. Sheppard (2005) ‘The Introduction of Price Signals into Land Use Planning Decision-making: a proposal’, Urban Studies, 42 (4), 647-663. City of London (1991) Unitary Development Plan, Department of Planning: Corporation of London. Davis Langdon (2005) Spon’s Architects’ and Builders’ Price Book 2005. London: Spon Press. Evenson, B. and W.C. Wheaton (2003) ‘Local Variation in Land Use Regulation’, Brookings-Wharton Papers 221-260. Fainstein, S.S. (1994) The City Builders: Property, politics and planning in London and New York, Blackwell: Oxford. Fischel, W.A. (2001) The Home Voter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land-Use Policies, Cambs, Mass: Harvard University Press. Gardiner and Theobald (2006) International Construction Cost Survey, London: Gardiner & Theobald. Glaeser, E.L. and J. Gyourko (2003) ‘The Impact of Building Restrictions on Housing Affordability’, Federal Reserve Bank of New York Economic Policy Review, June. Glaeser, E.L., J. Gyourko and R.E. Saks (2005) ‘Why is Manhattan so Expensive? Regulation and the Rise in Housing Prices’, Journal of Law and Economics, 48 (2), 331-369. Gyourko, J. and J. Tracey (1991) ‘The Structure of Local Public Finance and the Quality of Life’, Journal of Political Economy, 99, 4, 774-806. Gyourko, J., C. Mayer and T. Sinai (2005) ‘Superstar Cities’, Working Paper, Wharton School. Hillier Parker (1983) ‘Investors Chronicle – Hillier Parker Rent Index’, Investors Chronicle, No. 12, May 1983. IAURIF (2002) Les Cahiers de L’IAURIF 135, Paris: IAURIF. Ihlanfeldt, K. and T. Shaughnessy (2004) ‘An Empirical Investigation of the Effect of Impact Fees on Housing and Land Markets’, Regional Science and Urban Economics, 34, 639-661. KingSturge (2003 to 2005) Global Industrial and Office Rents Survey, London: KingSturge. Mayer, C.J. and C.T. Somerville (2000) ‘Land Use Regulations and New Construction’, Regional Science and Urban Economics, 30, 6, 639-662. Mayo, S. and S. Sheppard (2001) ‘Housing Supply and the Effects of Stochastic Development Control’, Journal of Housing Economics, 10, 109-128. Muellbauer, J. (2005) ‘Property Taxation and the Economy after the Barker Review’, Economic Journal, 115 (502), C99-C117. Needham, B. (1992) ‘A Theory of Land Prices when Land is Supplied Publicly: the case of the Netherlands’, Urban Studies, 29 (5), 669-686. Phillips, J. and E. Goodstein (2000) ‘Growth Management and Housing Prices: The Case of Portland’, Contemporary Economic Policy, 18, 334-44. Reading Chronicle (1989), 12 May. Roger Tym & Partners (2005) Greater London Authority Employment Projections Technical Paper 2. London Employment Site Database. Technical Notes and Results, London: Greater London Authority. Song, Y. and G. Knaap (2003) ‘New urbanism and housing values: a disaggregate assessment’, Journal of Urban Economics, 54, 218-238.