INGRAM HONG Proceedings of the 2006 Land Policy Conference LAND PO li C I ES AND T LL A A N N D D PP O O LL II CC IESIES H E I ANDAND TTHHEEIIRR OUTCOMESOUTCOMES R OUTCOMES Edited by Gregory K. Ingram and Yu-Hung Hong Ingram cover.indd 6 3/12/07 3:14:47 PM Land Policies and Their Outcomes Edited by Gregory K. Ingram and Yu-Hung Hong BBD: Hong FM Page ii - 4/20/2007, 07:20PM Achorn International BBD: Hong FM Page iii - 4/20/2007, 07:20PM Achorn International © 2007 by the Lincoln Institute of Land Policy All rights reserved. Library of Congress Cataloging-in-Publication Data Land policies and their outcomes / edited by Gregory K. Ingram and Yu-Hung Hong. p. cm. Includes index. ISBN-13: 978-1-55844-172-9 ISBN-10: 1-55844-172-7 1. Land use, Urban—Congresses. 2. City planning— Congresses. I. Ingram, Gregory K. II. Hong, Yu-Hung. HD1319.L37 2007 333.77—dc22 2007008649 Designed by Vern Associates Composed in Sabon by Achorn International in Bolton, Massachusetts. Printed and bound by Webcom Limited in Toronto, Ontario, Canada. The paper is Legacy Trade Book White, an acid-free, recycled sheet. manufactured in canada BBD: Hong FM Page iv - 4/20/2007, 07:20PM Achorn International BBD: Hong FM Page v - 4/20/2007, 07:20PM Achorn International CONTENTS List of Tables viii List of Figures xi Preface xv Introduction 1 1. Issues and Themes 3 Gregory K. Ingram and Yu-Hung Hong Public Actions and Property Prices 19 2. Restricting Residential Construction 21 Edward L. Glaeser 3. Regulation and Property Values in the United States: The High Cost of Monopoly 46 John M. Quigley Commentary 66 Katherine A. Kiel 4. The Efficiency and Equity of Tiebout in the United States: Taxes, Services, and Property Values 68 Thomas J. Nechyba Commentary 87 Daphne A. Kenyon 5. The Economics of Conservation Easements 90 Andrew J. Plantinga Commentary 118 V. Kerry Smith The Importance of Land Value in Today’s Economy 125 6. The Value of Land in the United States: 1975–2005 127 Karl E. Case BBD: Hong FM Page iv - 4/20/2007, 07:20PM Achorn International BBD: Hong FM Page v - 4/20/2007, 07:20PM Achorn International vi contents Commentary 148 Stephen Malpezzi 7. Urban Land Rents in the United States 157 David Barker Commentary 181 Robin A. Dubin Land and Property Taxation 183 8. Land Value Taxation as a Method of Financing Municipal Expenditures in U.S. Cities 185 Richard W. England Commentary 201 Robert M. Schwab 9. Taxing Land and Property in Emerging Economies: Raising Revenue . and More? 204 Richard M. Bird and Enid Slack Commentary 234 Miguel Urrutia Urban Development and Revitalization 237 10. Asia’s Urban Century: Emerging Trends 239 Rakesh Mohan 11. The United Kingdom’s Experience in Revitalizing Inner Cities 259 Peter Hall Commentary 284 Jody Tableporter 12. Hopeful Signs: U.S. Urban Revitalization in the Twenty-First Century 286 Eugénie L. Birch Commentary 326 William C. Apgar BBD: Hong FM Page vi - 4/20/2007, 07:20PM Achorn International BBD: Hong FM Page vii - 4/20/2007, 07:20PM Achorn International contents vii New Developments in Land and Housing Markets 331 13. Community Land Trusts and Housing Affordability 333 Steven C. Bourassa Commentary 367 Stephen C. Sheppard 14. Multiple-Home Ownership and the Income Elasticity of Housing Demand 372 Eric Belsky, Zhu Xiao Di, and Dan McCue Commentary 401 Michael Carliner 15. Brazil’s Urban Land and Housing Markets: How Well Are They Working? 405 David E. Dowall Commentary 438 J. Vernon Henderson Contributors 441 Index 443 About the Lincoln Institute of Land Policy 464 BBD: Hong FM Page vi - 4/20/2007, 07:20PM Achorn International BBD: Hong FM Page vii - 4/20/2007, 07:20PM Achorn International 11 The United Kingdom’s Experience in Revitalizing Inner Cities Peter Hall A New Geography of Britain: 1977–2006 Urban revitalization policy in the U.K. essentially dates from 1977–1978, with a major shift away from regionally based development toward a more specific urban focus. This account proceeds chronologically from that point, through a series of policy shifts—in large part politically determined—to the present day, where it ends by posing some of the key questions now facing U.K. ur- ban regenerators. The essential background of this account is a fundamental shift in British economic geography (see the U.K. region map in figure 11.1): from a regional distinction, north-south, toward an urban distinction, cities-suburbs- countryside. Regional policy, pursued enthusiastically from 1945 onward, proved progressively less effective from the late 1960s. The new reality everywhere was the loss of manufacturing jobs—more than 3.1 million (40 percent) from 1966 to 1983—and the growth of service jobs. This shift was bound to affect the north of England (plus Scotland and Wales) disproportionately, because it had more manufacturing jobs to start with, whereas the services industry had always been highly concentrated in London and the South East. During 1979–1987, the south increased its share of service jobs from 47.5 percent to 48.7 percent, while the North West and Wales recorded absolute losses in services. Two service groups— distribution, hotels, and catering, and business and financial services—are particu- larly strong in the South East. But there was a corresponding urban effect: the top 20 fastest-growing towns in Britain, except Aberdeen, were in the South East, the South West, and East Anglia (Balchin 1989, 12). Thus, during the 1970s and 1980s deindustrialization, “tertiarization,” and technological innovation produced a new and more complex economic geography: job losses were most serious in the big industrial conurbations, including London, 259 BBD: Hong Page 259 - 4/20/2007, 01:13PM Achorn International 260 Peter Hall Figure 11.1 Regional Map of the United Kingdom Orkney Shetland Islands Islands Scotland Government Office Regions Government Office Regions apply to England only. North Northern Scotland, Northern Ireland, and Wales are not East Government Office Regions, but are often used as Ireland North equivalents for the purpose of representing statistics West Yorkshire and that cover whole of the U.K. The Humber East Midlands North East East of Wales England London South East South West Source: National Statistics Web site: www.statistics.gov.uk. Crown copyright material is reproduced with the permission of the Controller of HMSO. the West Midlands, Greater Manchester, and Merseyside, which suffered massive deindustrialization and failed to compensate fully through services, while dispersal continued to the semirural areas of the outer South East, East Anglia, the South West, and parts of the East Midlands, assisted by better communications. By the end of the 1980s, then, some parts of the north were prosperous—the so-called “northern lights”—and some parts of the south were nonprosperous. The old north–south dividing line now ran from the Severn to the Wash, leaving only three prosperous regions south of the line; the “north” had spread south, and parts of London had effectively become part of the north (Law 1980, 225–231; Damesick 1987, 23; Martin 1988, 29–34; Balchin 1989, 101). Some regional differences remained in place, however. Overseas inward invest- ment was strongly concentrated in the South East, and command and control—the center of gravity of firms—were focused there as well, including the key decisions about whether to open or close branch plants in the peripheral areas (Law 1980, BBD: Hong Page 260 - 4/20/2007, 01:13PM Achorn International the united kingdom’s experience in revitalizing inner cities 261 149; Fothergill and Guy 1990, 170). The south benefits from access to the wealthi- est markets, from skilled labor, and suitable premises (Law 1980, 203). London was (and is) a special case. It lost manufacturing jobs faster and gained service jobs more slowly than the U.K. as a whole. Between 1960 and 1985, its manufacturing workforce halved, and most kinds of service employment con- tracted as well, except financial and business services. By the late 1980s, London had the highest concentration of unemployment in the advanced industrialized world, heavily concentrated in a few boroughs and including a substantial propor- tion—41.6 percent in 1987—of long-term unemployed. The jobless included not only older workers, but large numbers in the 15–24 age group, who appeared to lack the necessary qualifications to enter London’s highly sophisticated services economy (Balchin 1989, 110–111, 120–122). White Paper to Canary Wharf: 1977–1990 Against these key shifts, which were becoming evident by the beginning of the 1970s, the story of urban regeneration in the U.K. essentially begins at the end of that decade. The 1977 White Paper on Inner Cities and the 1978 Inner Urban Areas Act represented a fundamental shift in U.K. policy: from regional to urban aid, in particular aid to the deprived inner cities. This shift, it must be stressed, was bipartisan in nature: between 1975–1976 and 1979–1980, under a Labour govern- ment, regional expenditure declined by 60 percent in real terms; the Conservatives under Prime Minister Margaret Thatcher continued this trend (Regional Studies Association 1983, 8–9; Martin 1988, 42; Balchin 1989, 67; Larsson 1989, 32–33). In parallel, expenditure on the urban program was dramatically increased, from £30 million to £165 million a year, and a total of 7 partnership authorities, 15 pro- gram areas, and 14 “other” districts were designated for more funds, plus 5 “other” areas in Wales. Each had the power to provide 90 percent loans for land acquisition and site preparation, to make loans or award grants to cooperative or common own- ership enterprises, and to declare industrial improvement areas, within which grants could be awarded for improvement or conversion of old industrial or commercial property.