The Dutch Land Market: A Regional Tool for Policy Impact on Vacancy and Grant Rates

Purpose – The land market in the Netherlands uses a model in which the municipalities are the land use policy makers, but also act as active stakeholder in the development, and so grant land for profits. The acquisition and granting of this type of land has been very lucrative, this enticed the municipalities to become the largest land owner in the Dutch land market. Municipalities started to act speculatively and rely on these extra incomes. Now, that demand is not evolving as expected, it becomes apparent that even after the crisis there will be a large oversupply. To ensure incomes on business land, municipalities are searching for methods to increase demand. There is large inter-municipal competition for attracting new, but mostly relocating, firms. It is therefore important to examine the effects of policy deployment on the total business property stock, to prevent excessive vacancy in the current stock.Design/methodology/approach – For this paper demand and supply are extruded into two dimensions, quantitative and qualitative. The qualitative aspects are identified with location theory representing the demand on the micro-scale. These aspects influence the companies’ preferences for a location that again vary over different industry sectors. Further, these preferences were quantified with a ‘Bayesian classifier network’ in combination with ‘random utility theory’. On the macro scale, the demand is quantified by using the employment indicators for a certain industry sector. On the other hand, supply is simply represented with the existing business parks stock. Demand and supply are then combined in an agent based model in which simulated companies make microeconomic decisions based on previously determined variables. To verify and indicate the applicability of the developed approach, a real case study was conducted for the conurbation of Eindhoven in the province of Noord Brabant in the Netherlands.Findings – The model approximates the demand and vacancy of the municipal land supply and investigates the applicability of certain land use intervention policies. The developed model is supplied with an interface which allows decision makers to use it as a decision support tool.Originality/value – As previous research has identified the quantitative demand on the macro scale, this research incorporates also ‘qualitative aspects’ such as the location and allocation. These aspects reflect the micro scale supply and demand of business land.