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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (62665)	4/24/2005 7:48:33 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 74559

Consider a major city like Munich . . . Rigid land use regulations have allocated half of the land for streams and parks! Worse still building height is still limited to the maximum which could be reached by long obsolete fire equipment. In spite of all this, Munich is a vibrant, cultural and business center, yet affordable and pleasant. . . . But if some land is zoned for development and the rest is not. Land for development is scarcer, thus shouldn't the price of the development land be higher than would otherwise be the case? The short answer is -- all that land foolishly allocated to parks does not affect price -- because it reduces land for employment and wealth creation in the same proportion that it reduces land for homes and wealth dissipation. . . Development beyond that level occurs elsewhere. *********** You mention Edward Glaeser, a man who is unable to distinguish between the effect urban density, and thus income density, have on land price and the impact of land use regulation. Let's examine a sad little passage from his recent paper "Why Is Manhattan So Expensive? Regulation and the Rise in House Prices" (August 2004) Edward L. Glaeser, Joseph Gyourko and Raven Saks. "New York City’s high wages (real per capita income rose from $26,730 to $46,349 in 2002 dollars between 1979 and 1997) and attractive amenities make the demand for its space understandable, but increases in the demand for housing need not result in large price increases. In many places, increases in the supply of housing offset increases in demand, leaving housing prices relatively unaffected. The population of Las Vegas almost tripled between 1980 and 2000, but the real median housing price did not change. In fact, in more than one-third of the larger American cities that added housing units faster than the national rate since 1980, real median housing prices actually fell. In the sprawling cities of the American heartland, land remains cheap, real construction costs are falling, and expanding supply keeps housing prices down. I hope I do not have to elaborate on the stupidity of this passage. Because of the large size of New York city, it is allocated almost exclusively to employment with precious little space allocated to residential use. Relative to most cities, the residential areas of New York city are not inside the city itself. Comparing New York to Las Vegas is like comparing a high density city like Sydney, where commuters live in Penrith, to a dispersed city like Perth. Average home prices in Los Angeles county are much lower than New York as this sample includes a large number of homes, which in distance from downtown Los Angeles, are homes in rural areas of New Jersey. In my opinion, Edward Glaeser is a buffoon. .