Urban Economics Up-to-date economic research to cities, regions and the environment.

The mixed effects of mixed land use

The mixed effects of mixed land use

In recent decades, the concept of mixed land use (MLU) has been hailed by urban planners for diminishing the demand for car transport and improving the vitality of urban neighbourhoods. My thesis attempts to better understand how diversity affects the value of land in an urban area. The findings indicate that in general firms dislike mixing with other land uses within the same building while preferring to locate on a mixed street. This suggests that solely from a producer’s perspective, horizontal mixing (on the street) is preferred to vertical mixing (within a building).

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Are big-box stores emptying the city centre?

Are big-box stores emptying the city centre?

In recent years, many governments have adopted restrictive policies in response to the opening of big-box supermarkets. The economic consequences of the opening up of these new supermarkets became an important policy concern in most countries. A recent study shows that after the first big-box opening, between 20 and 30% of the grocery stores in the area disappear, offering clear evidence that city centres are losing part of their economic activity. However, when focusing on other retailers, the results also indicate that most of the empty commercial premises are taken by other type of small retailers. Hence, big-box store opening is a big threat to grocery stores, making them shut down after the opening, but it does not seem to be the case for the city centre’s activity in general.

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Urban revitalisation programmes may be effective

Urban revitalisation programmes may be effective

In recent research together with Jos van Ommeren we show that the Krachtwijken programme – a large urban revitalisation programme – does have positive effects. Compared to similar neighbourhoods, housing prices have increased and selling times are shorter. The programme’s benefits to homeowners are sizeable and at least half of the value of investments in public housing.

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You cannot regulate empty houses away

You cannot regulate empty houses away

“Almost 57,000 homes in London stand empty…” writes David Smith in the Guardian on May 4th. This he claims is a significant cause of London’s housing problem and the “Key to this is tackling buy-to-leave investing.” The answer to this ‘problem’ is for the mayor to refuse planning permission and for Boroughs ”…to introduce planning restrictions …to prohibit the deliberate practice of letting properties lie empty.“ However, is making planning permission more difficult to get or imposing additional conditions a feasible way of reducing the proportion of empty homes?

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London’s Congestion Charge and its Effects on Office Rents

London’s Congestion Charge and its Effects on Office Rents

Modern cities enjoy many benefits connected to dense population and proximity of firms, but also face negative effects of agglomeration. In an urban context, external effects of traffic like noise and air pollution, or traffic congestion are some of the most significant issues for policy makers. In theory, congestion charging leads to the situation that everyone pays for the costs their trip imposes on others. London is one of the most famous examples of a large city introducing an inner city congestion zone. The policy required a strong political effort and met resistance from the public and the commercial sector inside the congestion zone. But does this resistance makes sense? Have office locations in the congestion charge zone become more or less attractive due to the implementation of the congestion charge?

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Parking and car ownership: Will cheap parking spaces increase car ownership?

Parking and car ownership: Will cheap parking spaces increase car ownership?

Many cities in Europa are congested. A high population density and historic city centres imply that there is little space left that can be used for parking. Parking in European cities is therefore expensive. In the Netherlands residents can get a parking permit so that for them it is possible to park their cars close to their homes. In Amsterdam, households pay usually about €100 to € 400 for a yearly parking permit. This is not much if we compare it with the prices that are paid on the market for parking spaces in the city centre of Amsterdam or the prices visitors have to pay. But what are the economic effects of these implicit parking subsidies?

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Housing values, gas extraction and earthquakes

Housing values, gas extraction and earthquakes

Earthquakes in the northern parts of the Netherlands generate notable house price decreases. We have analysed the negative economic effects for homeowners of earthquakes induced by gas extraction. Earthquakes with a magnitute above 2.2 are shown to generate house price decreases of 1.2 percent. In the Netherlands, homeowners are fully compensated for earthquake damage to their residential buildings by the gas extraction company, which is a regulated monopolist. Despite this compensation, house price decreases have been shown by the economists. The average decrease induced by an earthquake with a magnitude above 2.2 is about €2500 ($ 2750) per property. The house price reduction in the whole area due to these man-made earthquakes is about €150 million ($165 million) or € 500 ($550) per household.

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Should we invest in historic buildings?

Should we invest in historic buildings?

In many countries, vast amounts of public money are invested to preserve historic buildings. In the Netherlands, for example, total public expenditures on renovation subsidies have been more than a billion euros since the 1970s. An important argument for these subsidies are that these historic buildings generate benefits for the surrounding neighbourhood. Indeed, few people will dislike it to have a stroll in the historic city centres of Amsterdam, Utrecht or Leiden. Although it is not hard to come up with an estimate of the costs of these investments, the potential benefits of these investments are hard to capture. This implies that we cannot make informed decisions on how much public money we are willing to spend on historic buildings and neighbourhoods.

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Renewable energy and negative externalities: the effect of wind turbines on house prices

Renewable energy and negative externalities: the effect of wind turbines on house prices

By Martijn Dröes* and Hans Koster [click here for a Dutch version of this blog] Households are in general not in favour of having wind turbines in the vicinity of their property: wind turbines may cast shadows, and imply noise and visual pollution. However, in the Netherlands the goal…

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The local impacts of climate change: Evidence from property prices around the world

The local impacts of climate change: Evidence from property prices around the world

According to the International Energy Agency, overall CO2 emissions are likely to reach 12-15 gigatons by 2030. The renown British economist Nicholas Stern (2008) warns that “The world would probably lose more than half its species. Storms, floods, and droughts would probably be much more intense than they are today.” These projections have strong implications for both the insurance industry and real estate markets.

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