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The welfare effects of character protections on neighbourhoods

Author

Listed:
  • Ryan Greenaway-McGrevy
  • James Allan Jones

Abstract

We extend the monocentric model to examine the effects of character protections on household welfare. Protections indirectly generate amenity values for residents but require floor area ratio (FAR) restrictions on housing development, presenting a trade-off between welfare-increasing amenities and welfare-decreasing floorspace constraints. Welfare effects become negative when the associated FAR restrictions of character protections are sufficiently tight. This is more likely when protections apply to neighbourhoods that have high demand due to proximity to non-character amenities or employment locations. Calibrating the model to Auckland, we find negative welfare effects, equivalent to a reduction in representative household income of $391 to $1,375 per year.

Suggested Citation

  • Ryan Greenaway-McGrevy & James Allan Jones, 2024. "The welfare effects of character protections on neighbourhoods," Working Papers 014, University of Auckland, Economic Policy Center (EPC).
    • Handle: RePEc:cyc:wpaper:014
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    File URL: https://www.auckland.ac.nz/assets/business/about/our-research/documents/WP-014.pdf
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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