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Optimization of floor area ratio regulation in a growing city

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  • Joshi, Kirti Kusum
  • Kono, Tatsuhito

Abstract

Maximum floor area ratio (FAR) regulation is widely imposed in cities to mitigate negative population externalities (e.g. congestion). This paper presents determination of optimal FAR regulation in a two-zone city with a growing population. Results show the following. 1) Maximum FAR regulation alone is generally insufficient. It should be accompanied by minimum FAR regulation in one zone. 2) Optimal regulation at a particular time depends on expected changes in zonal populations over the longest replacement time among newly built buildings at that time. 3) Zonal optimal FAR is expected to vary with time, which might even necessitate replacement of maximum FAR with minimum FAR, and vice versa.

Suggested Citation

  • Joshi, Kirti Kusum & Kono, Tatsuhito, 2009. "Optimization of floor area ratio regulation in a growing city," Regional Science and Urban Economics, Elsevier, vol. 39(4), pages 502-511, July.
  • Handle: RePEc:eee:regeco:v:39:y:2009:i:4:p:502-511
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    References listed on IDEAS

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    Cited by:

    1. Borck, Rainald, 2014. "Will skyscrapers save the planet?," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100566, Verein für Socialpolitik / German Economic Association.
    2. Takayama, Yuki & Kuwahara, Masao, 2016. "Bottleneck congestion and residential location of heterogeneous commuters," MPRA Paper 68940, University Library of Munich, Germany.
    3. Rainald Borck & Jan K. Brueckner, 2016. "Optimal Energy Taxation in Cities," CESifo Working Paper Series 5711, CESifo Group Munich.
    4. Borck, Rainald, 2016. "Will skyscrapers save the planet? Building height limits and urban greenhouse gas emissions," Regional Science and Urban Economics, Elsevier, vol. 58(C), pages 13-25.
    5. Lozano-Gracia, Nancy & Young, Cheryl & Lall, Somik V. & Vishwanath, Tara, 2013. "Leveraging land to enable urban transformation : lessons from global experience," Policy Research Working Paper Series 6312, The World Bank.
    6. Ioannis Tikoudis & Erik T. Verhoef & Jos N. van Ommeren, 2015. "Second-best Urban Tolls in a Monocentric City with Housing Market Regulations," Tinbergen Institute Discussion Papers 15-006/VIII, Tinbergen Institute.
    7. repec:tpr:restat:v:99:y:2017:i:4:p:663-677 is not listed on IDEAS
    8. Jan K. Brueckner & Shihe Fu & Yizhen Gu & Junfu Zhang, 2017. "Measuring the Stringency of Land Use Regulation: The Case of China's Building Height Limits," The Review of Economics and Statistics, MIT Press, vol. 99(4), pages 663-677, July.
    9. Hirte, Georg & Rhee, Hyok-Joo, 2016. "Regulation versus Taxation," CEPIE Working Papers 05/16, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    10. Fuess, Roland & Koller, Jan A., 2017. "Best Land Use with Negative Externalities: Determining Land Values from Residential Rents," Working Papers on Finance 1705, University of St. Gallen, School of Finance.
    11. Clune, Stephen & Morrissey, John & Moore, Trivess, 2012. "Size matters: House size and thermal efficiency as policy strategies to reduce net emissions of new developments," Energy Policy, Elsevier, vol. 48(C), pages 657-667.
    12. Rhee, Hyok-Joo & Yu, Sanggyun & Hirte, Georg, 2014. "Zoning in cities with traffic congestion and agglomeration economies," Regional Science and Urban Economics, Elsevier, vol. 44(C), pages 82-93.
    13. Kono, Tatsuhito & Joshi, Kirti Kusum, 2012. "A new interpretation on the optimal density regulations: Closed and open city," Journal of Housing Economics, Elsevier, vol. 21(3), pages 223-234.
    14. Kono, Tatsuhito & Joshi, Kirti Kusum & Kato, Takeaki & Yokoi, Takahisa, 2012. "Optimal regulation on building size and city boundary: An effective second-best remedy for traffic congestion externality," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 619-630.

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