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Reflections on the nature and policy implications of planning restrictions on housing supply. Discussion of 'Planning policy, planning practice, and housing supply' by Kate Barker

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  • Paul Cheshire

Abstract

Planning is about other things as well, but it is fundamentally an economic activity. It allocates a scarce resource but independently of prices or any market information. In analysing the effects this allocative mechanism has on housing supply (or, indeed, the supply of buildings for any given use), we need to think carefully about what exactly it is that planning allocates and whether, in its operation, it creates a constraint on the supply of what it is allocating. In the British case, our planning system does not operate on the supply of housing directly, but indirectly via the constraint imposed on land supply. Given the income elasticity of demand for space this has policy implications perhaps even more serious than is acknowledged by Barker

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File URL: http://hdl.handle.net/10.1093/oxrep/grn002
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Article provided by Oxford University Press in its journal Oxford Review of Economic Policy.

Volume (Year): 24 (2008)
Issue (Month): 1 (spring)
Pages: 50-58

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Handle: RePEc:oup:oxford:v:24:y:2008:i:1:p:50-58

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  1. Glaeser, Edward L & Gyourko, Joseph & Saks, Raven, 2005. "Why Is Manhattan So Expensive? Regulation and the Rise in Housing Prices," Journal of Law and Economics, University of Chicago Press, vol. 48(2), pages 331-69, October.
  2. P. C. Cheshire & Stephen Charles Sheppard, 2005. "The introduction of price signals into land use planning decision-making : a proposal," LSE Research Online Documents on Economics 568, London School of Economics and Political Science, LSE Library.
  3. J. Phillips & E. Goodstein, 2000. "Growth management and housing prices: the case of Portland, Oregon," Contemporary Economic Policy, Western Economic Association International, vol. 18(3), pages 334-344, 07.
  4. Edward L. Glaeser & Joseph Gyourko, 2003. "The impact of building restrictions on housing affordability," Economic Policy Review, Federal Reserve Bank of New York, issue Jun, pages 21-39.
  5. Song, Yan & Knaap, Gerrit-Jan, 2003. "New urbanism and housing values: a disaggregate assessment," Journal of Urban Economics, Elsevier, vol. 54(2), pages 218-238, September.
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