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Strategies for Alleviating Housing Shortages: Evaluating the Fiscal Effects and Profitability of Residential Land Development

Author

Listed:
  • Julius Range
  • Albert Erasmus Grafe

Abstract

Economic profitability of land development is a major driver for land consumption but is prone to increasing political scrutiny and environmental concerns. Our paper aims to quantify the income tax effects of increases in residential areas in Germany. We estimate the effect based on a detailed synchronized panel database for German counties. Applying a spatial regression approach, we address the heterogeneity of regions as well as neighboring and spill-over effects. Our findings suggest that an increase in residential areas has a significant positive effect on income tax revenue. We relate these estimates to average costs for green- and brownfield development. Our research sheds new light on the interplay between revenues and costs in residential land development.

Suggested Citation

  • Julius Range & Albert Erasmus Grafe, 2024. "Strategies for Alleviating Housing Shortages: Evaluating the Fiscal Effects and Profitability of Residential Land Development," ERES eres2024-078, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2024-078
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    More about this item

    Keywords

    Land Consumption; Spatial regression; tax revenues; Urban Development;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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