Spatial Growth and Redevelopment with Perfect Foresight and Durable Housing

Braid, Ralph M.

doi:10.1006/juec.2000.2199

Cited by 53 publications

(26 citation statements)

References 39 publications

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“…The apartment owner faces several joint decisions: whether to redevelop (w 1 ), when to redevelop (T), and how high to redevelop (d 1 ). Studies on the theory of urban growth suggest that landowners choose optimal timings of redevelopment and densities at the time of redevelopment to maximize land values (see, for example, Brueckner, 1980;Arnott, 1980;Wheaton, 1982;Amin and Capozza, 1993;Braid, 2001). 11 To derive optimal conditions for these choice variables, we express the existing owner's profit from redevelopment in (2) in present value term such that…”

Section: A Modified Model Of House Value Determinationmentioning

confidence: 99%

Dwelling Age, Redevelopment, and Housing Prices: The Case of Apartment Complexes in Seoul

Lee

Chung

Kim

2005

J Real Estate Finan Econ

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The aging of a housing structure not only leads to depreciation but also increases the possibility of redevelopment. If redevelopment accompanies an increase in structural density in order to accommodate the increased demand for housing, it provides large capital gains to the existing owners. In this case, expectations of redevelopment in the near future and the eventual announcement of redevelopment plans can have a strong positive impact on the current price of housing. We test this hypothesis using a hedonic pricing model designed to decompose the age effects into depreciation effect and redevelopment effect. Based on 3,474 observations on apartments in Seoul in 2001, estimation results confirm our hypothesis. While the depreciation effect dominates the redevelopment effect until 15 to 19 years of age, depending on the specification, the redevelopment effect eventually dominates the depreciation effect thereafter, causing the apartment price to increase. At 27 years of age, the apartment price decreases by as much as 45∼53 percent of the initial value, due to depreciation. However, the redevelopment effect increases the price by as much as 28∼32 percent, driving the price up to 76∼87 percent of the original value. Copyright Springer Science + Business Media, Inc. 2004dwelling age, redevelopment, hedonic pricing, apartments,

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Section: A Modified Model Of House Value Determinationmentioning

confidence: 99%

Dwelling Age, Redevelopment, and Housing Prices: The Case of Apartment Complexes in Seoul

Lee

Chung

Kim

2005

J Real Estate Finan Econ

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“…Issues related to durability of real estates and its costly conversion and replacements are also discussed by Anas. See also Arnott (1980Arnott ( , 1987, Brueckner (1981), Brueckner and Pereira (1994), Arnott et al (1999), Braid (2001), Frame (2004), and Glaeser and Gyourko (2005) for introducing more realistic aspects of housing market to the growth model. A recent literature review is referred to Lin et al (2004).…”

Section: Residential Areamentioning

confidence: 99%

Growth, economic structure, and residential distribution of a small city

Zhang

2009

Int Rev Econ

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“…23 The first generation of such models, including Anas (1978) and Fujita (1976Fujita ( , 1982, allow for only a single development on each site; subsequent models, including Brueckner (1980) and Wheaton (1982), allow for a sequence of developments. The most sophisticated model along these lines is Braid (2001).…”

Section: Concluding Commentsmentioning

confidence: 99%

The Property Tax as a Tax on Value: Deadweight Loss

Arnott

Petrova

2006

Int Tax Public Finan

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Consider an atomistic developer who decides when and at what density to develop his land, under a property value tax system characterized by three time-invariant tax rates: τ V , the tax rate on pre-development land value; τ S , the tax rate on post-development residual site value; and τ K , the tax rate on structure value. Arnott (2005) identified the subset of property value tax systems that are neutral. This paper investigates the relative efficiency of four idealized, non-neutral property value tax systems [(i) “Canadian'' property tax system: τ V =0, τ S =τ K ; (ii) simple property tax system: τ V =τ S =τ K ; (iii) residual site value tax system: τ K =0,τ V =τ S ; (iv) two-rate property tax system: τ V =τ S > τ K > 0] under the assumption of a constant rental growth rate. Copyright Springer Science + Business Media, Inc. 2006property taxation, site value taxation, land taxation, deadweight loss,

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Spatial Growth and Redevelopment with Perfect Foresight and Durable Housing

Cited by 53 publications

References 39 publications

Dwelling Age, Redevelopment, and Housing Prices: The Case of Apartment Complexes in Seoul

Dwelling Age, Redevelopment, and Housing Prices: The Case of Apartment Complexes in Seoul

Growth, economic structure, and residential distribution of a small city

The Property Tax as a Tax on Value: Deadweight Loss

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