IDEAS home Printed from https://ideas.repec.org/a/sae/urbstu/v42y2005i3p471-502.html
   My bibliography  Save this article

The Impact of Planning on Local Business Rents

Author

Listed:
  • John Henneberry

    (Department of Town and Regional Planning, University of Sheffield, Western Bank, Sheffield, S102TN, UK, j.henneberry@.sheffield.ac.uk)

  • Tony McGough

    (Finance Faculty, CASS Business School, City University, 106 Bunhill Row, London, ECIY8TZ, UK, t.mcgough@city.ac.uk)

  • Fotis Mouzakis

    (Finance Faculty, CASS Business School, City University, 106 Bunhill Row, London, ECIY8TZ, UK, f.mouzakis@city.ac.uk)

Abstract

Despite the pervasiveness of planning intervention in the land and property market, the economic effects of the planning system have been little researched. While there is a growing body of work addressing this issue in the housing sector, similar work considering the business sector is marked only by its absence. The paper describes the first substantive attempt to explore this subject area through an analysis of the impact of planning on business rents. A full structural model of a local property market was developed. It incorporates the planning regime as a key element of the system and it allows for the interaction between property market use sectors. The model formed the basis for the creation of a simplified five-equation system that could be operationalised within extant data constraints. Upon application, a local effect of planning was identified that was consistent with theory. As planning regimes become tighter, the local supply of space decreases. This has a negative effect on local economic activity and a positive effect on local rents. However, the results must be much qualified. The study was affected by various limitations relating to data, to the geography upon which the model was based and to its cross-sectional character. Nevertheless, the work makes a contribution to the development of a theoretically robust model for analysing and estimating the effect of planning on the property sector of the local economy.

Suggested Citation

  • John Henneberry & Tony McGough & Fotis Mouzakis, 2005. "The Impact of Planning on Local Business Rents," Urban Studies, Urban Studies Journal Limited, vol. 42(3), pages 471-502, March.
    • Handle: RePEc:sae:urbstu:v:42:y:2005:i:3:p:471-502
    DOI: 10.1080/00420980500035261
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1080/00420980500035261
    Download Restriction: no
    File URL: https://libkey.io/10.1080/00420980500035261?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Silver, M & Goode, M, 1990. "Econometric forecasting model for rents in the British retail property market," Omega, Elsevier, vol. 18(5), pages 529-539.
    2. Paul Cheshire & G. Carbonaro, 1996. "Urban Economic Growth in Europe: Testing Theory and Policy Prescriptions," Urban Studies, Urban Studies Journal Limited, vol. 33(7), pages 1111-1128, August.
    3. Kenton L. Ownbey & Kyle Davis & Harvey H. Sundel, 1994. "The Effect of Location Variables on the Gross Rents of Neighborhood Shopping Centers," Journal of Real Estate Research, American Real Estate Society, vol. 9(1), pages 111-124.
    4. Eamonn D'Arcy & Tony McGough & Sotiris Tsolacos, 1997. "National economic trends, market size and city growth effects on European office rents," Journal of Property Research, Taylor & Francis Journals, vol. 14(4), pages 297-308, January.
    5. Nanda Nanthakumaran & Craig Watkins & Allison Orr, 2000. "Understanding Property Market Dynamics: Insights from Modelling the Supply-Side Adjustment Mechanism," Environment and Planning A, , vol. 32(4), pages 655-671, April.
    6. Paul Cheshire & Stephen Sheppard, 1989. "British Planning Policy and Access to Housing: Some Empirical Estimates," Urban Studies, Urban Studies Journal Limited, vol. 26(5), pages 469-485, October.
    7. Wheaton, William C & Torto, Raymond G & Evans, Peter, 1997. "The Cyclic Behavior of the Greater London Office Market," The Journal of Real Estate Finance and Economics, Springer, vol. 15(1), pages 77-92, July.
    8. R Barras & D Ferguson, 1987. "Dynamic Modelling of the Building Cycle: 2. Empirical Results," Environment and Planning A, , vol. 19(4), pages 493-520, April.
    9. Geoffrey Meen, 2001. "The Economic Role of New Housing," ERES eres2001_231, European Real Estate Society (ERES).
    10. Simon Stevenson & Oliver McGarth, 2003. "A comparison of alternative rental forecasting models: empirical tests on the London office market," Journal of Property Research, Taylor & Francis Journals, vol. 20(3), pages 235-260, January.
    11. Henry O. Pollakowski & Susan M. Wachter & Lloyd Lynford, 1992. "Did Office Market Size Matter in the 1980s? A Time‐Series Cross‐Sectional Analysis of Metropolitan Area Office Markets," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 20(2), pages 302-324, June.
    12. Richard J. Buttimer, Jr. & Ronald C. Rutherford & Ron Witten, 1997. "Industrial Warehouse Rent Determinants in the Dallas/Fort Worth Area," Journal of Real Estate Research, American Real Estate Society, vol. 13(1), pages 47-56.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sotiris Tsolacos & Tony McGough, 1999. "Rational Expectations, Uncertainty and Cyclical Activity in the British Office Market," Urban Studies, Urban Studies Journal Limited, vol. 36(7), pages 1137-1149, June.
    2. Geoffrey Meen & Kenneth Gibb & Daniel Mackay & Michael White, 2001. "On The Interrelationship Between Housing and Industrial Construction," ERES eres2001_232, European Real Estate Society (ERES).
    3. Robert Thompson & Sotiris Tsolacos, 2000. "Projections in the Industrial Property Market using a Simultaneous Equation System," Journal of Real Estate Research, American Real Estate Society, vol. 19(2), pages 165-188.
    4. Dimitrios Papastamos & George Matysiak & Simon Stevenson, 2014. "A Comparative Analysis of the Accuracy and Uncertainty in Real Estate and Macroeconomic Forecasts," Real Estate & Planning Working Papers rep-wp2014-06, Henley Business School, University of Reading.
    5. Rena Sivitanidou, 1999. "Does the Theory of Irreversible Investments Help Explain Movements in Office-Commerical Construction?," Working Paper 8659, USC Lusk Center for Real Estate.
    6. Allison M. Orr & Colin Jones, 2003. "The Analysis and Prediction of Urban Office Rents," Urban Studies, Urban Studies Journal Limited, vol. 40(11), pages 2255-2284, October.
    7. A J McGough & S Tsolacos, 1997. "The Stylised Facts of the UK Commercial Building Cycles," Environment and Planning A, , vol. 29(3), pages 485-500, March.
    8. Catherine Jackson, 2001. "A Model of Spatial Patterns across Local Retail Property Markets in Great Britain," Urban Studies, Urban Studies Journal Limited, vol. 38(9), pages 1445-1471, August.
    9. Yanfang Sun & Haiyan Xie & Xirong Niu, 2019. "Characteristics of Cyclical Fluctuations in the Development of the Chinese Construction Industry," Sustainability, MDPI, vol. 11(17), pages 1-14, August.
    10. Adams, David, 2008. "Mapping out the regulatory environment and its interaction with land and property markets," Energy Policy, Elsevier, vol. 36(12), pages 4570-4574, December.
    11. Dirk Brounen & Maarten Jennen, 2009. "Asymmetric Properties of Office Rent Adjustment," The Journal of Real Estate Finance and Economics, Springer, vol. 39(3), pages 336-358, October.
    12. V. Atilla Oven & Dilek Pekdemir, 2006. "Perceptions of office rent determinants by real estate brokerage firms in Istanbul," European Planning Studies, Taylor & Francis Journals, vol. 14(4), pages 557-576, May.
    13. Kieran Farrelly & Ben Sanderson, 2005. "Modelling Regime Shifts in the City of London Office Rental Cycle," Journal of Property Research, Taylor & Francis Journals, vol. 22(4), pages 325-344, December.
    14. V.Atilla Oven & Dilek Pekdemir, 2004. "A comparison between office rent determinants of Istanbul and other major metropolitan areas," ERSA conference papers ersa04p166, European Regional Science Association.
    15. Arvydas Jadevicius & Brian Sloan & Andrew Brown, 2012. "Examination of property forecasting models - accuracy and its improvement through combination forecasting," ERES eres2012_082, European Real Estate Society (ERES).
    16. Eddie Chi Man Hui & Ka Hung Yu, 2006. "Simulating Hong Kong’s Office Leasing Market via System Dynamics Modeling," International Real Estate Review, Global Social Science Institute, vol. 9(1), pages 23-43.
    17. Catherine Jackson & Craig Watkins, 2007. "Supply-Side Policies and Retail Property Market Performance," Environment and Planning A, , vol. 39(5), pages 1134-1146, May.
    18. Simon Stevenson & James Young, "undated". "Capital Market Expectations and the London Office Market," Real Estate & Planning Working Papers rep-wp2011-09, Henley Business School, University of Reading.
    19. Alan W. Evans, 1996. "The Impact of Land Use Planning and Tax Subsidies on the Supply and Price of Housing in Britain: A Comment," Urban Studies, Urban Studies Journal Limited, vol. 33(3), pages 581-585, April.
    20. Coën, Alain & Lefebvre, Benoit & Simon, Arnaud, 2018. "International money supply and real estate risk premium: The case of the London office market," Journal of International Money and Finance, Elsevier, vol. 82(C), pages 120-140.

    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:sae:urbstu:v:42:y:2005:i:3:p:471-502. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.gla.ac.uk/departments/urbanstudiesjournal .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.