Under tenancy rent control, rents are regulated within a tenancy but not between tenancies. This paper investigates the effects of tenancy rent control on housing quality and maintenance. Since the discounted revenue received over a fixed-duration tenancy depends only on the starting rent, intuitively the landlord has an incentive to spruce up the unit between tenancies in order to "show" it well, but little incentive to maintain the unit well during the tenancy. The paper formalizes this intuition and presents numerical examples illustrating the efficiency loss from this effect.
For many years, Donald Shoup has been advocating cashing out free and underpriced curbside parking. How should this be implemented in practice, taking into account the stochasticity of curbside parking vacancies? Shoup has proposed setting neighborhood/period of the day-specific meter rates such that a common target (average) curbside parking occupancy rate is achieved. Taking as given how the average occupancy rate affects expected cruising-for-parking time and expected walking time (between parking space and destination), this paper investigates the optimal (surplus-maximizing) target curbside parking occupancy rate. The principal result is that the rate should be higher, the higher is the level of demand.
Over the past 30 years Calgary has doubled in size, from a population of 640,645 in 1985 to 1,230,915 in 2015. During that time the City has had five different mayors, hosted the Winter Olympics, and expanded the C-Train from 25 platforms to 45. Calgary's Metropolitan Area has grown too, with Airdrie, Chestermere, Okotoks and Cochrane growing into full-fledged cities, ripe with inter-urban commuters.* And with changes to provincial legislation in the mid-'90s, rural Rocky View County and the Municipal District of Foothills are now real competitors for residential, commercial and industrial development that in the past would have been considered urban. In this metropolitan system, where people live, their household structure, and their place of work informs the services they need to conduct their daily lives, and directly impacts the spatial character of the City and the broader region. In sum, Metropolitan Calgary is increasingly complex. Calgary and the broader metropolitan area will continue to grow, even with the current economic slowdown. Frictions within Calgary, between the various municipalities in the metropolitan area, and the priorities of other local authorities (such as the School Boards and Alberta Health Services) will continue to impact the agendas of local politicians and their ability to answer to the needs of their residents. How resources – whether it is hard infrastructure, affordable housing, classrooms, or hospital beds – are allocated over space and how these resources are funded, directly impacts these relationships. This technical paper provides my perspective as an urban economist on the efficient allocation of resources within a metropolitan system in general, with reference to Calgary where appropriate, and serves as a companion to the previously released "Reflections on Calgary's Spatial Structure: An Urban Economists Critique of Municipal Planning in Calgary." It is hoped that the concepts reviewed herein effectively expand upon and supplement the discussion in the former paper. The urban economic perspective adopted in this paper is itself not inconsistent with the public economics perspective but it pays more attention to space, and metropolitan transportation and land use policy, and less to tax policy and intergovernmental fiscal arrangements. I will explore the following sources of inefficiency within a metropolitan system: 1) local public goods, 2) externalities, and 3) economies of scale, starting with a short background on classic market failure and second-best policy.
Affordable housing and a manageable commute are central to the well-being of Calgarians. Yet among larger Canadian metropolitan areas today, Calgary already has close to the most expensive housing, and the average journey-to-work time, close to 30 minutes, is as high today as it was in Los Angeles in 2000, when Los Angeles had a population 10 times larger. Decisions around how Calgary grows are based on the policies within The City's Municipal Development Plan and the Calgary Transportation Plan, which together provide a blueprint for Calgary's spatial development and transportation system. These plans— and therefore, their assumptions about future effects on congestion and rents — are based around a population forecast that does not reflect the historical growth pattern of the city and legitimizes spatial containment. The shortcomings in these plans, both adopted in 2009, are likely to result in longer commuting times and even more expensive real estate prices. These will be well beyond what The City has prepared citizens to expect and accept, as planners plow ahead with proposals to further entrench the downtown as the dominant employment centre. Calgarians need to be levelled with about the realities that come with pursuing a plan that calls for spatial containment and intensification centred on a single, dominant central business district. The plans present a vision of the "Good Urban Life," and propose to enforce it through a particular choice of transportation system, through land-use regulation, and through a downtown parking freeze, with little regard to economics. The cost of this vision will in turn discourage new firms and new people from moving to Calgary. Calgarians should be informed about future transportation costs – for mass transit and automobiles – in congestion, time, and funding. And they must be informed about the effects this will all have on the cost of property for families and businesses. Only then can citizens properly consider their options and choose their city's future. Without that Calgarians may find their quality of life diminished in ways they were never prepared to expect.
All countries have a formal economy and an informal economy. But, on average, in developing countries the relative size of the informal sector is considerably larger than in developed countries. This paper argues that this has important implications for housing policy in developing countries. That most poor households derive their income from informal employment effectively precludes income-contingent transfers as a method of redistribution. Also, holding fixed real economic activity, the larger is the relative size of the informal sector, the lower is fiscal capacity, and the more distortionary is government provision of a given level of goods and services, which restricts the desirable scale and scope of government policy. For the same reasons, housing policies that have proven successful in developed countries may not be successful when employed in developing countries.
Abstract. The spatial distribution of economic activity is determined by a balancing of increasing and decreasing returns to scale activities. The Henry George Theorem states roughly that, if economic activity is efficiently organized over a "large" space, aggregate land rents equal the aggregate losses from the decreasing returns to scale activities. Kanemoto, Ohkawara, and Suzuki have tentatively applied the Henry George Theorem to investigate whether Tokyo has too large a population. This paper has two aims. The first is to explore the Theorem and its generality; the second is to examine whether it provides a promising conceptual foundation for estimating whether particular cities are over‐ or underpopulated.
The spatial mismatch hypothesis is that "Serious limitations on black residential choice, combined with the steady dispersal of jobs from central cities, are responsible for the low rates of employment and low earnings of Afro-American workers" (Kain, 1994, p. 371). Despite a wealth of related empirical studies, there has been little work formalising the hypothesis. This paper presents a trade-theoretic model, with three regions (downtown, suburbia and the rest of the world), four goods (a tradable home good, untraded services, a tradable foreign good and land), and two factors (skilled and unskilled workers). Blacks are constrained to live downtown but by incurring commuting costs can work in suburbia. Several exogenous changes are considered (for example a fall in transport costs between suburbia and the rest of the world) which may lead simultaneously to a fall in the downtown unskilled wage and to job suburbanisation, and which therefore provide a theoretical basis for the hypothesis.
In major cities parking costs typically exceed automobile running costs, while the time to find a parking spot and walk to work can be comparable to driving time. Yet models of urban commuting have ignored parking completely. The purpose of this paper is to examine the effects of parking on morning rush hour congestion and to assess the relative merits of road tolls and parking fees as tools for congestion relief. The paper extends Vickrey's (1969) bottleneck road congestion model by assuming on-street parking is located along commuting routes radiating from the CBD. Absent pricing, drivers occupy parking spots in order of increasing distance from the CBD. Three pricing schemes are considered: 1) an optimal time-varying road toll, 2) competitively set parking fees, and 3) optimal location-dependent parking fees. The optimal road toll is shown to eliminate queueing, but does not affect the order in which parking spots are occupied. In contrast, competitive parking fees do nothing to reduce queueing , but induce drivers to park in order of decreasing distance from the CBD, so that in the aggregate commuters arrive at work closer to their preferred time. Optimal parking fees reduce queueing in addition to supporting the efficient order of parking. For reasonable parameter values competitively set parking fees are found to be relatively inefficient-indeed potentially welfare-reducing. Optimal parking fees, however, are generally superior to a road toll. In light of the logistical drawbacks of tolls and political opposition that road pricing has met, this suggests that parking fees deserve more attention than they have received in the literature.
