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2016 GGSD Forum - Session 1: Presentation by Mr. Philip McCann, Faculty of Spatial Sciences. University of Groningen, The Netherlands

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Land Markets, Land Use and Planning in Fostering Sustainable Cities

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2016 GGSD Forum - Session 1: Presentation by Mr. Philip McCann, Faculty of Spatial Sciences. University of Groningen, The Netherlands

  1. 1. 1 Land Markets, Land Use and Planning in Fostering Sustainable Cities Philip McCann University of Groningen
  2. 2. Land Markets, Land Use and Planning in Fostering Sustainable Cities • Sustainable and inclusive cities agenda → land markets are largely neglected in academic literature • Urban economics, regional science, environmental economics, economic geography • Classical thinking about land markets → 1960s • Interactions between land use policies, planning policies, and other policies are complex • Institutional, cultural and language differences in ways of thinking about land between developers, financiers, architects, planners, engineers, economists, households, investors, or policy makers 2
  3. 3. Land Markets, Land Use and Planning in Fostering Sustainable Cities • Land markets are always political economy problems • Policy mistakes in sectoral decision-making often impact on land markets • Ability to think spatially depends in part on the governance and institutional structures • Nature and effectiveness of land use and planning tools → legal issues • Language and legal difficulties in learning international lessons • Land markets and land use policies → multiple goals and multiple stakeholders 3
  4. 4. Land Markets, Land Use and Planning in Fostering Sustainable Cities • Land use deregulation to increase supply and reduce house price growth is difficult • Incentives need to be aligned between households, commercial interests and public policies for any thematic priority • Land markets underlying housing markets → limited power of governments facing a ‘wicked problem’ • Need to ensure development permission leads to development • Need to avoid land banking → hedging and monopoly positions 4
  5. 5. Land Markets, Land Use and Planning in Fostering Sustainable Cities • Moves towards urban densification (compact cities) are desirable for health-related, energy and transport planning and also increasingly for age-related planning • Individual preferences may move in different or even opposite directions → differences by income, education, age, life-course • Population ageing and population decline • More than one third of Europe’s cities were declining in population prior to the crisis and this has been exacerbated by the crisis • Differential urban population growth due to migration 5
  6. 6. Land Markets, Land Use and Planning in Fostering Sustainable Cities • Urban planning becomes very difficult in population decline context • Asymmetries between population growth and decline • Urban boundaries with small population increases make city planning straightforward • City and regional growth models assume contant (ish) positive growth in population, GDP, real or nominal prices - Constant real or nominal prices with population growth - Nominal price growth with constant population 6
  7. 7. Land Markets, Land Use and Planning in Fostering Sustainable Cities • Population decline cities • Land values falling in real and/or nominal terms • Over supply of under-utilised infrastructure • Bankruptcies, failures and vacancies happen sporadically – scattergun holes in land markets • Maintenance and depreciation costs • Danger of assets being shorted, but also hold-out positions • Land assembly and contiguity challenges associated with managing decline → more compact city 7
  8. 8. Land Markets, Land Use and Planning in Fostering Sustainable Cities • Real estate shock effects are dominated by cities → induced effects in the real economy • Relatively higher transaction costs lead to relatively (absolutely) higher transition costs • Possibilities for urban policy financial investment vehicles mixing financial and non-financial returns? • Devolved governance is highly problematic in some cases → vulnerable fiscal positions • Questions regarding the long term financial basis of public investments in urban development → governance decentralisation and devolution is not just about accountability and mobilisation but also viability 8

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