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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
Land Markets, Land Use and
Planning in Fostering Sustainable
Cities
Philip McCann
University of Groningen
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
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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
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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
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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
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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
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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
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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
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