Measurement of Land Fragmentation in the Course of Building Activities

Fragmented land ownership is widely believed to be responsible for the difficulties in assembling the contiguous land parcels for a more dense development. In order to acquire a large number of small land parcels, an often excessively-high price needs to be paid, if and only if all the owners finally agree to the price. Even if all parcels are assembled, the soaring land price is to a large extent responsible for a high housing price. It has been therefore in many studies concluded that the fragmentation of land ownership tends to lead to an inert supply of land, and given a strong demand, will subsequently contribute to an elevated housing price.The above arguments seem to fit well into the scenario of Taipei City. Taipei is the capital and largest city in Taiwan, with a density of 9,593 inhabitants per km2 and a growing, though steadily, number of households. In addition, the housing price in Taipei has been overvalued by 38% and 27% compared to the fundamental prices derived from price/income and price/rent relationship, respectively. In order to accommodate the expanding demand for housing, fragmented land has to be assembled to pave way for the later development. In other words, developers will constantly purchase and consolidate small parcels into a larger one in a single ownership prior to the construction of new houses. Despite the theoretical and practical significance, little research has looked into the measurement of land fragmentation and the changes in the degree of fragmentation in the course of building activities. Understanding of land fragmentation is crucial for a comprehension of how land is priced, and how land is assembled and developed. This study examines in-depth the area of Wan-Hwa train station where was developed earliest in Taipei. We analyse the changes in land titles of every single parcel from 1970s through 1990s that cover at least two property cycles. Developers over the course of two property cycles must have engaged in land assembly for their building projects. Borrowed from other research fields such as agricultural productivity and income inequity, we apply Gini Coefficient, Simpson Index and Januszewski Index respectively to measure the distribution of land titles (shares) in this area over time. We will also examine the changes in the degree of land fragmentation within the context of property cycles. It is hoped that through observation of changes in the distribution of ownership on land, how land is assembled and buildings supplied in a city where housing affordability is a daunting problem can be better understood.