TY - JOUR
T1 - Welfare effects of floor area ratio regulation on landowners and residents with different levels of income
AU - Takeda, Yoshihiro
AU - Kono, Tatsuhito
AU - Zhang, Yang
N1 - Funding Information:
This research was supported by grants from the Ministry of Education, Culture, Sports, Science and Technology (Grant-in-Aid for Scientific Research C 26380285 ), which are gratefully acknowledged. Despite assistance from many sources, any remaining errors in the paper are the sole responsibility of the authors.
Publisher Copyright:
© 2019 Elsevier Inc.
PY - 2019/12
Y1 - 2019/12
N2 - This paper explores how Floor Area Ratio (FAR) regulations affect residents with income disparity and absentee landowners in a congested closed city. Theoretical results show that (1) an increase in FAR in a central zone may harm the utility of suburban residents due to the residential segregation pattern of heterogeneous people whereas it always increases the utility in a city with homogeneous households, and (2) how an increase in FAR changes land rents depends on the current FAR and the relative location of the zone where FAR increases. Numerical results clarify the effects of optimal FAR regulations on residents and absentee landowners. In addition, theoretical result (1) denoted above is numerically verified. Furthermore, it is found that optimal FAR gives higher benefits to high income households than to low income households regardless of the location pattern.
AB - This paper explores how Floor Area Ratio (FAR) regulations affect residents with income disparity and absentee landowners in a congested closed city. Theoretical results show that (1) an increase in FAR in a central zone may harm the utility of suburban residents due to the residential segregation pattern of heterogeneous people whereas it always increases the utility in a city with homogeneous households, and (2) how an increase in FAR changes land rents depends on the current FAR and the relative location of the zone where FAR increases. Numerical results clarify the effects of optimal FAR regulations on residents and absentee landowners. In addition, theoretical result (1) denoted above is numerically verified. Furthermore, it is found that optimal FAR gives higher benefits to high income households than to low income households regardless of the location pattern.
KW - Congestion toll
KW - Floor area ratio regulation
KW - Heterogeneous households
KW - Land use regulation
KW - Property tax residential segregation
UR - http://www.scopus.com/inward/record.url?scp=85073249734&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85073249734&partnerID=8YFLogxK
U2 - 10.1016/j.jhe.2019.101656
DO - 10.1016/j.jhe.2019.101656
M3 - Article
AN - SCOPUS:85073249734
SN - 1051-1377
VL - 46
JO - Journal of Housing Economics
JF - Journal of Housing Economics
M1 - 101656
ER -
