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?
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.
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.
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 set by the Renewable Energy Directive is to increase the…
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.
Historic buildings and income sorting
Why is the city centre of Amsterdam with the canals so expensive? Why are people willing to pay more to live in Kralingen, Rotterdam, than in the city centre? One important reason, although it is certainly not the only one, seems to be the presence of historic buildings. In the Netherlands, but also in other…
The gains of trains
Congestion problems on the road and environmental constraints are causing a renewed interest for public transport. In the Netherlands, about a month ago, a major rail extension between Lelystad and Zwolle was opened. Further, in the last decade several new railway stations have been opened in the Netherlands (for example Halfweg-Zwanenburg, Sassenheim, see Figure). As is well known, railway improvements are extremely costly for society. It is therefore important to know if the society benefits from railway improvements, and more specifically, benefits from the opening of new stations.
The internal structure of cities: the economics of agglomeration, amenities and accessibility
[this is the summary of my dissertation; click here for the Dutch summary] Introduction We have seen a vast increase in the number of people residing in urbanised areas in the last two centuries. It rose from about 7.5 percent in 1800 to more than 50 percent nowadays (Huriot and Thisse, 2000; Glaeser and…