Commercial Revitalization in Low-Income Urban Communities: General Tax Incentives vs. Direct Incentives to Developers
AbstractThis paper proposes a commercial development model, based on Fujita's (1988) monopolistic competition model of spatial agglomeration, to examine stores' decisions to enter urban communities. The model focuses on commercial developers and large stores, and identifies a potential holdup problem in the commercial development market arising because developers incur costs before negotiating with anchor tenants over pro fit sharing; the holdup problem is more likely to occur in low-income communities where the profitability of commercial projects is small. The model predicts that direct incentives to developers are preferred to general tax incentives for addressing this market failure.
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Bibliographic InfoPaper provided by University of Alberta, Department of Economics in its series Working Papers with number 2012-4.
Length: 23 pages
Date of creation: 01 Jan 2012
Date of revision:
urban redevelopment programs; economic agglomeration; holdup problem;
Find related papers by JEL classification:
- H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
- H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
- R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-02-01 (All new papers)
- NEP-GEO-2012-02-01 (Economic Geography)
- NEP-PBE-2012-02-01 (Public Economics)
- NEP-PPM-2012-02-01 (Project, Program & Portfolio Management)
- NEP-URE-2012-02-01 (Urban & Real Estate Economics)
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