4 ms·

Loosening zoning would increase their land values though.

deleted 7y ago
[deleted]
erentz 7y ago
I think that effect only happens today in most places due to the pent up demand and restrictive zoning in place. E.g.: In Seattle when they upzone a small area it immediately goes up in value because a builder can put say four houses now and sell more units. There is nowhere else that can be done so that land has a premium on it due to the restrictive zoning in the rest of the city. Now if the whole city was up zoned at the same time then the zoning would not affect the value of the land, only its amenity and location factors as per usual. In fact in this case land values would likely drop overall because now more units can be built everywhere allowing more people to live in the city in a variety of housing types, we reduced the supply demand gap and that affects the value of land overall.
- clairity 7y ago
  it’s quite unlikely that land value will go down with upzoning. when you can build more, the value you can extract from a fixed amount of land goes up. but what may happen is that an individual unit on that land may sell for a little less for a short period of time.
falcolas 7y ago
If, and only if, you want to leverage the value of your land by selling or borrowing against it. If you don't want to (or don't need to) do either of these, loosening the zoning restrictions would only make your location less valuable (industry/dense housing moving into a formerly townhome exclusive neighborhood) to you. Money is not the only value land has.
- shuckles 7y ago
  No, it just makes those amenities more expensive to maintain at that location. This is as it should be since the opportunity cost is so high. For example, here is an example of homeowners paying a developer to not build on an adjacent lot to preserve their preferences: https://therealdeal.com/2019/07/22/chelsea-residents-paid-gary-barnett-11m-to-protect-their-views-from-a-planned-tower/ https://therealdeal.com/2019/07/22/chelsea-residents-paid-ga... Right now, the above is possible by regulatory capture, shifting the cost of preservation onto adjacent landowners who do want to build and the larger community for underutilizing a precious, shared resource (land).

deleted 7y ago

[deleted]

I think that effect only happens today in most places due to the pent up demand and restrictive zoning in place. E.g.: In Seattle when they upzone a small area it immediately goes up in value because a builder can put say four houses now and sell more units. There is nowhere else that can be done so that land has a premium on it due to the restrictive zoning in the rest of the city. Now if the whole city was up zoned at the same time then the zoning would not affect the value of the land, only its amenity and location factors as per usual. In fact in this case land values would likely drop overall because now more units can be built everywhere allowing more people to live in the city in a variety of housing types, we reduced the supply demand gap and that affects the value of land overall.

clairity 7y ago
it’s quite unlikely that land value will go down with upzoning. when you can build more, the value you can extract from a fixed amount of land goes up. but what may happen is that an individual unit on that land may sell for a little less for a short period of time.

falcolas 7y ago

If, and only if, you want to leverage the value of your land by selling or borrowing against it. If you don't want to (or don't need to) do either of these, loosening the zoning restrictions would only make your location less valuable (industry/dense housing moving into a formerly townhome exclusive neighborhood) to you. Money is not the only value land has.

shuckles 7y ago
No, it just makes those amenities more expensive to maintain at that location. This is as it should be since the opportunity cost is so high. For example, here is an example of homeowners paying a developer to not build on an adjacent lot to preserve their preferences: https://therealdeal.com/2019/07/22/chelsea-residents-paid-gary-barnett-11m-to-protect-their-views-from-a-planned-tower/ https://therealdeal.com/2019/07/22/chelsea-residents-paid-ga... Right now, the above is possible by regulatory capture, shifting the cost of preservation onto adjacent landowners who do want to build and the larger community for underutilizing a precious, shared resource (land).