Vacant Land and Vacancy Rates

This paper focuses on the influence of governments on the land supply of commercial property, especially offices, in relation to the optimal vacancy rate. The primary goal is to clarify the different approaches and the effects of (non-) interventions. Mostly land policy is seen as an exogenous variable. The paper outlines the results of active policy interventions for office markets. Recently research has established that there is a significant relation between the natural vacancy rates and the supply of land at the office market in Singapore to support economic development in general. Singapore has a highly sophisticated and integrated set of land policy instruments based on an extremely high public ownership. Whether the supply process is carried out by a public body can affect the volume of production, and hence the price of land and real estate. Empirical results show that governments plan their land sales programmes to influence the economy. This raises questions about the situation in cities in other countries where the government plays a different, less important role. The comparison is based on five cities. The cities collected in this comparative research are selected on their upper laying welfare state typology that is based on research of Esping-Andersen (1999).