IDEAS home Printed from https://ideas.repec.org/a/bla/reesec/v27y1999i4p669-694.html
   My bibliography  Save this article

The Industrial Organization of Housing Supply: Market Activity, Land Supply and the Size of Homebuilder Firms

Author

Listed:
  • C. Tsuriel Somerville

Abstract

Existing studies of housing markets assume that homebuilding is a homogeneous, perfectly competitive industry. This paper uses MSA-level data on the average size of homebuilder establishments and homebuilder market concentration to test the appropriateness of this paradigm. The data reveal a wide and systematic variation across metropolitan-area housing markets in both the average size of builders and the market share for the largest builders in an MSA. These results are more consistent with treating homebuilders as monopolistically competitive suppliers of a differentiated product than with treating them as perfectly competitive homogeneous firms. Builders are larger in more active housing markets and where there is a greater supply of readily developed land suitable for large developments. Builder size and concentration are sensitive to the type of regulating jurisdiction imposing land-use regulation. Both are lower when land-use regulations are imposed by smaller jurisdictions, and this is particularly true when the smaller jurisdictions impose more intense regulation. Copyright American Real Estate and Urban Economics Association.

Suggested Citation

  • C. Tsuriel Somerville, 1999. "The Industrial Organization of Housing Supply: Market Activity, Land Supply and the Size of Homebuilder Firms," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 27(4), pages 669-694.
  • Handle: RePEc:bla:reesec:v:27:y:1999:i:4:p:669-694
    as

    Download full text from publisher

    File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/1540-6229.00788
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mark S. Coleman & Ralph Gentile, 2001. "Exploring the Dynamics of Building Supply: A Duration Model of the Development Cycle," Journal of Real Estate Research, American Real Estate Society, vol. 21(1/2), pages 21-42.
    2. Francisco Brahm & Jorge Tarzijan, 2016. "Relational Contracts and Collaboration in the Supply Chain: Impact of Expected Future Business Volume on the Make-or-Buy Decision," Journal of Supply Chain Management, Institute for Supply Management, vol. 52(3), pages 48-67, July.
    3. Ball, Michael & Meen, Geoffrey & Nygaard, Christian, 2010. "Housing supply price elasticities revisited: Evidence from international, national, local and company data," Journal of Housing Economics, Elsevier, vol. 19(4), pages 255-268, December.
    4. Pedro M. M. L. Garcês & Cesaltina Pacheco Pires, 2011. "New housing supply: what do we know and how can we learn more?," CEFAGE-UE Working Papers 2011_18, University of Evora, CEFAGE-UE (Portugal).
    5. Waldorf, Brigitte S. & Byun, Pillsung & Florax, Raymond J.G.M., 2005. "Strategic Interaction and Spatial Multiplier Effects in Local Growth Control Policies: The California Housing Market," 2005 Annual meeting, July 24-27, Providence, RI 19574, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Michelsen, Claus & Rosenschon, Sebastian & Schulz, Christian, 2015. "Small might be beautiful, but bigger performs better: Scale economies in “green” refurbishments of apartment housing," Energy Economics, Elsevier, vol. 50(C), pages 240-250.
    7. Steven Ott & W. Hughen & Dustin Read, 2012. "Optimal Phasing and Inventory Decisions for Large-Scale Residential Development Projects," The Journal of Real Estate Finance and Economics, Springer, vol. 45(4), pages 888-918, November.
    8. Jonatan Almagor & Itzhak Benenson & Daniel Czamanski, 2014. "The evolution of the developers' industry and city structure Simulation using an Agent Based Model," ERSA conference papers ersa14p1148, European Regional Science Association.
    9. Ching, Stephen & Fu, Yuming, 2003. "Contestability of the urban land market: an event study of Hong Kong land auctions," Regional Science and Urban Economics, Elsevier, vol. 33(6), pages 695-720, October.
    10. Brahm, Francisco & Tarziján, Jorge, 2012. "The impact of complexity and managerial diseconomies on hierarchical governance," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 586-599.
    11. repec:bla:stratm:v:37:y:2016:i:12:p:2481-2502 is not listed on IDEAS
    12. Brent W. Ambrose & Joe Peek, 2008. "Credit Availability and the Structure of the Homebuilding Industry," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 36(4), pages 659-692, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:reesec:v:27:y:1999:i:4:p:669-694. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://edirc.repec.org/data/areueea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.