tag:blogger.com,1999:blog-9745623013770419142024-03-14T16:31:00.177+00:00CEP Urban and Spatial Programme BlogCEP Urban and Spatial Programme Blog (formerly SERC)Unknownnoreply@blogger.comBlogger469125tag:blogger.com,1999:blog-974562301377041914.post-71951600066055540402021-07-26T14:53:00.001+01:002021-07-26T14:53:51.518+01:00A final blog postThank you for visiting our blog. <div><br /></div><div>A little over 13 years ago (17 June 2008) the first posts on this blog helped launch the <a href="http://www.spatialeconomics.ac.uk/"> Spatial Economics Research Centre (SERC)</a>.
And in the 468 posts since - clocking up just under 2.4m views - we have covered spatial issues ranging from regeneration, housing supply and prices, HS2, the high street, planning reforms, superfast broadband, Brexit and the impact of Covid-19 on the housing market. </div><div><br /></div><div>The blog outlasted SERC - which became part of the Urban Programme at the Centre for Economic Performance (CEP) in September 2015. </div><div><br /></div><div>Many of us who used the blog to post about urban economic policy and our related research are still involved with the CEP's urban programme.
Indeed, we've just launched another five year programme which you can read about <a href="https://cep.lse.ac.uk/_new/our-work/Urban/">here</a>. </div><div><br /></div><div>But this is the final post we'll be making here. </div><div><br /></div><div>We've no plan to close the blog down, so you should still be able to access all the past articles (although we have turned off comments). </div><div><br /></div><div>Thanks to everyone who's posted over the years and to all of you who have read and commented.
</div>Prof Henry G. Overmanhttp://www.blogger.com/profile/15203876610491317062noreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-23820481971825563112020-10-01T16:43:00.005+01:002020-10-01T16:43:49.029+01:00Planning for the Future: some solutions for our housing crisis at last?<h3><span style="font-family: arial;"><span style="font-size: small;">By Paul Cheshire </span></span></h3><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">The white paper, <i style="mso-bidi-font-style: normal;"><a href="https://www.gov.uk/government/consultations/planning-for-the-future">Planning
for the future</a></i>, published in early August 2020 represents the first
serious attempt to reform our dysfunctional land use planning system since its
inception. Although the <a href="https://www.gov.uk/government/publications/barker-review-of-land-use-planning-final-report-recommendations">Barker
report’s</a> diagnosis of how our planning system caused our housing shortage
were well researched, the recommendations for change did no more than paint
some steely surfaces over the crumbling fabric of planning. They were fixes for
an unfixable system. This white paper promises more.</span></span></p><span style="font-family: arial;">
</span><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">Its recommendations
tackle two of the four policy-created barriers to building enough houses of the
type, and in the places, people want to live in (adding extra uncertainty and
risk to development; restricting land to build on; just saying you can’t; and
giving communities no incentive to accept development: see <a href="Broken%20market%20or%20broken%20policy?%20The%20unintended%20consequences%20of%20restrictive%20planning">my
article for NIESR</a>). If implemented cleanly and transparently the proposals
would greatly reduce the risks and uncertainty our present system imposes on
builders, while providing some incentive to local communities to accept new
development and funds for the infrastructure that new developments require. At
the same time, rather than destroying planning and undermining democracy as
claimed by its critics, the proposals <span style="mso-spacerun: yes;"> </span>would strengthen planning and retain full
democratic local control ensuring standards of environmental protection were
maintained while improving the quality of new development.</span></span></p><span style="font-family: arial;">
</span><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">Central to our planning
system, since its creation in 1947, is its discretionary and piecemeal decision
making. This is really the antithesis of “planning”: every decision about
significant development is a one-off made by local politicians. Decisions do
not necessarily reflect the “plan”. This is not just because only about half of
local authorities (LAs) <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/508345/Local-plans-report-to-governement.pdf">have
a valid local plan</a>: even when they do have a plan, planning committees’ decisions
often do not follow it. </span></span></p><span style="font-family: arial;">
</span><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">Moreover, since there is
no standard set of definitions nor format for storing or accessing local plans,
it requires detailed local knowledge to understand what “the plan” says. This
means it is also impossible to evaluate the system as a whole since there is no
comprehensive database on plans (where there are plans). <a href="https://www.lse.ac.uk/business-and-consultancy/consulting/consulting-reports/housing-sprint-land-report">Researchers
at LSE and Knight Frank</a> spent a total of 18 months trying to generate
comparable data on how much land LAs were allocating for housing. Even this
effort was only able to produce data for 107 LAs and careful inspection showed
that data from a total of only 73 were credible and could be adjusted so they
were comparable. </span></span></p><span style="font-family: arial;">
</span><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">So government may have
elaborate, even sensible guidelines, as to how much land LAs should be
allocating for housing but there is absolutely no way of evaluating the effect
of such guidelines. The oldest of these guidelines is that LAs should supply
land to accommodate expected population growth. This may be a very bad
principle since it gives no weight to local affordability but the evidence from
the 73 LAs – as far as it went – was that LAs did the opposite. On average the
faster the local population had grown in the previous five years, the less land
was supplied</span></span></p><span style="font-family: arial;">
</span><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">So this gives us two
reasons why our planning system adds risk and uncertainty to the development
process: we do not know what “planning” is doing and we cannot anticipate
whether any particular development proposal will be permitted. The white paper
proposes to: </span></span></p><span style="font-family: arial;">
</span><ul style="text-align: left;"><li><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;"><span style="mso-list: Ignore;"><span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-optical-sizing: auto; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-variation-settings: normal; font-weight: normal; line-height: normal;"></span></span></span><span style="font-size: 12pt; line-height: 107%;">require LAs to make plans in a standard
format, using a common GIS template (making the results transparent): and</span></span></li><li><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;"><span style="mso-list: Ignore;"><span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-optical-sizing: auto; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-variation-settings: normal; font-weight: normal; line-height: normal;"></span></span></span><span style="font-size: 12pt; line-height: 107%;"><span style="mso-spacerun: yes;"></span>move
away from the current political decision on every significant proposal –
effectively randomised decision-making – to a rule-based system. This would
mean any new development consistent with the local plan and local design rules
would almost automatically go ahead. As is the case in most Continental
European countries now.</span></span></li></ul><span style="font-family: arial;">
</span><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">LAs would have to have
plans which identified land according to three categories: i) Growth Areas where
outline permission will be given subject to agreement on details; ii) Renewal
Areas suitable for some new development or redevelopment; and iii) Protected
Areas in which there is a presumption no development will be permitted.
Planning would still be democratic and local. LAs will develop their own plans
which may include enforceable design guides, and these plans will then be voted
on and adopted or amended. But once adopted, they then will determine decisions
so the current lottery of permission will disappear. </span></span></p><span style="font-family: arial;">
</span><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">The problem of having so
much uncertainty in our current decision-making – apart from the fact it means
there is in effect no systematic planning – is that the uncertainty creates a
substantial cost to developers. They need to build in a risk premium for any
proposal to be viable, so far fewer are. Take away the uncertainty as to the decision
and many more proposals will be viable: more houses will be built.</span></span></p><span style="font-family: arial;">
</span><p class="MsoNormal"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">The second excellent proposal in the white paper is to
abolish Section 106 Agreements and the Community Infrastructure Levy (CIL) and
replace them as I suggested in this <a href="https://www.planningresource.co.uk/article/1423777/capture-land-value-rises">Planning
piece (paywall)</a> with a simple Infrastructure Levy (IL) fixed as a
proportion of the sales price of the developments. The revenue from such an IL
– as explained in the report <a href="https://www.centreforcities.org/wp-content/uploads/2019/09/Homes-on-the-Right-Tracks-Greening-the-Green-Belt.pdf">Homes
on the Right Tracks</a> would be very substantial and more than sufficient to
pay not just for proper new infrastructure to support new development but
produce a much more generous flow of revenues for much needed social housing. A
further interesting twist to the IL proposal is that 25% of the revenues should
be spent in the neighbourhood of the development. One can see the attraction of
this since one of the underlying supports of NIMBYism is the reality that if
local communities permit new development they are, in effect, fined. There is a
statutory duty to provide new services for the additional residents, schools,
health care etc, but no guaranteed flow of revenues to pay for it. Local infrastructure
is liable to become more congested and service quality get worse. Having 25% of
the IL revenues go to the local community would offset for this.</span></span></p><span style="font-family: arial;">
</span><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">Section 106 Agreements
are individual one-off agreements negotiated by LAs with developers setting
conditions for granting permission. They most commonly oblige the developers to
provide a proportion of the new homes as so-called “affordable housing”. However,
as I explain below, if one was trying to come up with the least efficient
method possible of making housing more affordable then S106 Agreements would be
a strong contender. Planners and politicians like them because there are no
visible costs to public funds and it gives a sense of fulfilment to planners.
Big developers like them because S106 Agreements are a huge drag on smaller
developers; so they reduce competition and speed the monopolisation of the
development industry. </span></span></p><span style="font-family: arial;">
</span><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">The substantial
transactions cost – to both developers and LAs of negotiating them – is only the
tip of the iceberg of their costs, however. The real resource cost is hidden
and comes in the form of yet a third source of extra risk and financing costs
in development. The financial returns from any development depend on the form
and details of the S106 Agreement but those are not known in advance. Bigger
developers are better placed to manage this risk because they have both access
to capital and to local planning officers and politicians as well as their own
experts paid to double guess the system. Like the randomised decision making embodied
in our use of “development control/management” the use of S106 Agreements,
therefore, adds yet more risk to the development process requiring yet higher
risk premia, so fewer projects are viable and fewer houses are built. Add to
this the extra squeeze it puts on small developers and the resulting reduction
in competition further reduces total building. Of course building fewer houses
over time increases their price so reduces housing affordability in aggregate. </span></span></p><span style="font-family: arial;">
</span><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">Yet a further positive
proposal in the white paper is to require LAs to decide how much land to
allocate to either Growth or Renewal Areas explicitly to take account of local
housing affordability (as originally suggested in <a href="http://eprints.lse.ac.uk/568/">The introduction of price signals into
land use planning decision-making : a proposal</a>) as a “binding requirement”.
The details will matter but at least if the standardised format for local plans
is up and running, it will be possible to see how much land each LA is
allocating for housing so the “binding requirement” will be potentially
enforceable. As things are at present since there is no central record, and in
many cases no record, of how much land is being allocated for development - any
rules supposed to be used to guide the process are effectively useless.</span></span></p><span style="font-family: arial;">
</span><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">The white paper also
contains traps and unresolved issues, some of which are subject to consultations.
Perhaps the most dangerous trap is the proposal to enhance design quality by
having an accelerated approval process to ‘fast-track’ beauty (Proposal 14).
While better quality design and place-making is an admirable goal the danger of
this particular proposal is that is difficult to see how it could work without
reintroducing by the back door, a whole new process of local piecemeal and no
doubt partial and contentious “development control” under a new guise. Much
better to have good design guidelines and some rewards for high-quality
development such as a partial remission ex-post of the liability for paying the
IL.</span></span></p><span style="font-family: arial;">
</span><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">Another danger is that
the IL may degenerate into a form of CIL, controlled by the whim of LAs (indeed,
as with local plans, only about half of LAs bother to charge CIL at all and of
those that do, many manipulate rates to act as a second line of development
control). For it to work to improve the planning system and land value capture
for the community’s benefit it is imperative that:</span></span></p><span style="font-family: arial;">
</span><ol><li><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;"><span style="mso-list: Ignore;"><span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-optical-sizing: auto; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-variation-settings: normal; font-weight: normal; line-height: normal;"></span></span></span><span style="font-size: 12pt; line-height: 107%;">its revenues are spent only on items
nationally identified – basically supporting local infrastructure and social
housing; </span></span></li><li><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;"><span style="mso-list: Ignore;"><span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-optical-sizing: auto; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-variation-settings: normal; font-weight: normal; line-height: normal;"></span></span></span><span style="font-size: 12pt; line-height: 107%;">revenues are ring-fenced from Treasury
depredations. No point in providing an incentive to encourage local communities
to accept new development if the Treasury may take it away next year in its
block grant determinations; and</span></span></li><li><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;"><span style="mso-list: Ignore;"><span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-optical-sizing: auto; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-variation-settings: normal; font-weight: normal; line-height: normal;"></span></span></span><span style="font-size: 12pt; line-height: 107%;">the same rate is applied in all local
authorities. The reason for this last is, of course, to provide an incentive
that varies according to local housing shortages. Where housing is more
expensive a uniform rate of <span style="mso-spacerun: yes;"> </span>say 20% on
sales value – will generate more revenue. If there is concern that this would
be unfair, damaging the “levelling-up agenda”, than, much better than having
rates determined locally, would be to have a fixed proportion of revenues paid
into some central “levelling-up fund” which would be used to provide
differential support for the poorest communities or regions.</span></span></li></ol><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial;"><span style="font-size: 12pt; line-height: 107%;">There are still important
issues related to the present planning system and its crippling effects on
housing supply that are unaddressed in the white paper but it seems more
constructive to welcome the positives. If the proposals in the white paper are
implemented in a clean and transparent way many more houses will get built,
homes will become more affordable and many jobs will be created. </span></span></p>
Prof Henry G. Overmanhttp://www.blogger.com/profile/15203876610491317062noreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-25005162988397602020-04-17T19:19:00.000+01:002020-04-18T14:12:32.336+01:00COVID-19: Crashing the Economy so what will it do for the Housing Market?<br />
<h3>
<span style="font-family: inherit; font-size: small;">By Paul Cheshire and Christian Hilber</span></h3>
<div>
<span style="font-family: inherit; font-size: medium;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;"><span style="font-family: "arial" , "helvetica" , sans-serif;">To speculate usefully about the effects of the
COVID-19 pandemic on Britain’s housing markets one needs a clear analytical
understanding of how our housing markets work and what forces cause them to
change. Given the extreme uncertainty about the impact and evolution of the
COVID-19 pandemic, anything in this blog is in some sense speculation, but we
hope informed speculation. A recent </span><a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3566909">academic paper</a><span style="font-family: "arial" , "helvetica" , sans-serif;"> analysing the impacts on house prices and rents of
historic epidemics in Amsterdam and Paris found only relatively short lived and
localised reductions in house prices and smaller effects on rents than on
prices. While useful, we are cautious about trying to draw direct lessons from
such historic examples: not least because the extent of lockdown and economic
disruption now is an order of magnitude greater. COVID-19 is a true pandemic,
affecting the whole interdependent world economy at the same time: it is not
localised to Amsterdam, New York or Wuhan. </span><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="background-color: white;">Moreover, beyond its intrinsically lower fatality rate, modern medical understanding about the spread of disease and societal emphasis on saving lives are likely to mean much lower death rates from COVID-19 than from the Black Death or the cholera epidemic in 19th Century Paris: but disproportionately greater economic impact.</span></span></span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;">Apart from applying basic analytical tools it is
also probably useful to look at the impacts in terms of three time horizons:
the short term – over the next 6 to 9 months; the medium term -up to about
2024; and the long term – over the next ten-plus years. And, a warning, the
further ahead one looks the more uncertainty attaches to one’s predictions. But
we will do our best.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;">Britons have become conditioned to expect
rising house prices in real terms. After all they have increased fivefold since
the 1950s, faster than in any other OECD country. This rise has been driven mainly
by rising real incomes - over that period they increased threefold - and an
increasingly fixed supply of housing in large parts of the country, especially
where people want to live, within reach of good jobs. The supply of new houses
is so inflexible because our planning system is dysfunctional and our system of
local government finance provides virtually no incentives for local authorities
to permit development (see <a href="https://spatial-economics.blogspot.com/2016/07/the-uk-planning-system-fit-for-purpose.html">here</a>, <a href="https://spatial-economics.blogspot.com/2015/10/business-rates-hoorah-but-watch-out-for.htmll">here</a> or <a href="https://spatial-economics.blogspot.com/2016/02/greenbelt-madness-or-how-to-get-it-back.html">here</a>). It is rising real incomes that fuel the
demand for ‘housing services’ (<a href="https://spatial-economics.blogspot.com/2019/12/housing-no-shortage-is-it-nonsense.html">reflected in rents</a>) but part of what fuels
the demand for housing as an asset is rising house prices relative to the price
of other assets. And this, in turn, given the nearly fixed supply of houses, may
fuel further price rises.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;">So this is the first pointer to what the
COVID-19 crisis will do to the British housing market. In the very short term,
it will produce stasis: buying and selling will all but stop. Indeed, they
already have – Zoopla reports a 40% drop in enquiries for late March. Even when
the lockdown is over and the market ‘unfreezes’, the transaction volume is
likely to fall substantially. In part this will be because households are loss
averse and not likely to want to realise a loss; but also because of the
probable ongoing economic disruption discussed below. As WHO spokesman David
Nabarro claimed <a href="https://www.realclearpolitics.com/video/2020/04/12/who_special_envoy_coronavirus_will_stalk_the_human_race_for_quite_a_long_time_until_we_all_have_a_vaccine.html">on April 12</a>, the ‘virus will stalk us for years to come,
changing behaviour for the foreseeable future’. So prices will tend to fall,
especially as incomes disappear for large numbers of people, triggering, in
some cases, real financial distress and near forced sales. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;">While construction of new houses will be
severely restricted, because new build homes are such a small fraction of the
total stock, this will make little difference to total supply, so will do
little to offset the fall in house prices. Moreover, the vast majority of
COVID-19 induced deaths - which could be anywhere in the region of 20,000 and 170,000 over the next few years, but is likely to be towards the upper end of that range<a href="file:///D:/Files/Documents/Spatial%20Centre/Blogs/COVID%20housing%20blog%20v15%20(1).docx#_ftn1" name="_ftnref1" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference">[1]</span><!--[endif]--></span></a> -
will be of elderly people, freeing up some existing stock and thus reinforcing,
slightly, the temporary downward trend in house prices. Overall, the supply
side effect of COVID-19 on house prices may be rather muted as the two effects
(on construction and freed stock) may largely offset each other. <o:p></o:p></span></div>
<span style="font-family: inherit; font-size: medium;"><br /></span>
<br />
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;">Thus, in the short term three things mainly
matter:</span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;">1. How far will lenders be willing – even be able - to flex to minimise the number of forced sales? Forced sales quickly translate into falling house prices as we saw in 1991;</span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;">2. How catastrophically will borrowers’ incomes be hit and for how long?</span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;">3. How much and for how long will real incomes fall?</span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;"><span style="text-indent: -18pt;">We are not medical experts so can offer no
professional forecast as to how long the epidemic will last, nor the length of
the severest disruption of normal economic activity resulting from the
lockdown. We can offer two depressing thoughts, however: despite reassuring
noises about renewed activity in China by the end of April, the Chinese, with
far stronger controls and draconian powers of enforcement, started the lockdown
in Wuhan on 23 January. In Britain, a far less effective lockdown started two
months later. The Chinese began a gradual easing of their lockdown from 8
April. So maybe the UK lockdown will continue till early June, two months after
the start of the easing in China. But even then the easing will be gradual and
the resumption of normal economic activity will take probably months. Moreover,
if the </span><span style="text-indent: -18pt;">Spanish
flu-pandemic that lasted from January 1918 to December 1920</span><span style="text-indent: -18pt;"> is any indication (see </span><a href="https://en.wikipedia.org/wiki/Spanish_flu" style="text-indent: -18pt;">here</a><span style="text-indent: -18pt;"> and </span><a href="https://www.youtube.com/watch?v=3x1aLAw_xkY" style="text-indent: -18pt;">here</a><span style="text-indent: -18pt;">), it is likely there will be a (deadlier)
second and possibly even third wave, depending on how quickly a vaccine can be
developed and made available.</span></span></div>
<div class="MsoNormal">
</div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: inherit; font-size: medium;">The second depressing thought is that the
longer the lockdown lasts, the slower the recovery will be. The economy appears
to be in freefall. Official data is hardly yet available but there was an
ingenious review of current indicators in the Financial Times <a href="https://www.ft.com/content/33c03dc6-ceab-40e5-b61f-66829c5b9b2c">on 8 April</a><span class="MsoHyperlink">: car sales down 44% in March; restaurant bookings on
Open Table – a sort of forward indicator – dropped to zero two days before the
official lockdown. The OBR </span><a href="https://obr.uk/">14<sup>th</sup>
April</a><span class="MsoHyperlink"> report was gloomy and emphasised that recovery from the
initial near catastrophic hit was dependent on businesses being able to re-set.
</span>But it looks increasingly likely that many businesses
will not survive: think of all those empty restaurants, bars or theatres;
consider all those empty planes or hairdressers’ salons, think about how many
small construction businesses, car dealers or gyms are at a standstill. The
physical fabric will survive, but the government’s initiative to provide emergency
finance seems plagued by delay and, while loans do not come, more and more businesses
will go under. Recovery will be much slower if the businesses themselves have
to be re-invented and established anew. Demand may be there and so may the
workers but there have to be businesses to organise the process of production
and employment. <o:p></o:p></span></div>
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<span style="font-family: inherit; font-size: medium;">Turning to the medium term, we first note that
the longer the lockdown and the more businesses go under, the slower the
bounce-back may be. The slower the economic bounce back, the slower the
recovery in the demand for housing – driven by earnings – will be. And even
when earnings start to recover, the savings of many will have been depleted.
Would-be buyers will find much of what they had set aside for deposits will
have gone on essential supplies to keep the household afloat while incomes were
down. Buying a home will have to be postponed again even if prices appear to be
more affordable. It took till 1945 for real house prices to get back to their
1931 levels: it took till late 2001 to get back to 1989 real values. House
prices may have increased nearly fivefold since 1955 but there have been
prolonged troughs along the way. We would not be surprised to find real house
prices in 2024 well below present-day real values. The economic downturn
triggered by COVID-19 may even equal that of the Great Depression of the 1930s.
However, construction of social housing may have a bit of a revival. <o:p></o:p></span></div>
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<span style="font-family: inherit; font-size: medium;">Lower house prices will not improve
affordability in the medium term, however, since the cause would be lower
incomes and depleted savings.<o:p></o:p></span></div>
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<span style="font-family: inherit; font-size: medium;">So what of the long term? To 2030 and beyond.
Here we get even more speculative but we will assume that the pandemic dies
away and the economy eventually recovers. The pandemic could even trigger an
innovation boost e.g. in communication technology (which might damage the
recovery of airlines and ground transport) or medicine. And, although we have
long argued for radical reforms to those policies impeding building more houses
where people want to live (such as releasing Green Belt land around commuter
stations or reforming the tax system to incentivise local authorities to permit
development), we will reluctantly assume there are none, at least no meaningful
ones. One of the downsides of our expected prolonged depression in real house
prices is that it may take the pressure off politicians to reform our
dysfunctional housing supply. <o:p></o:p></span></div>
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<span style="font-family: inherit; font-size: medium;">If this is true, construction will stay well
below the level needed to satisfy demand, so prices will take off when incomes
finally recover. However, the structure of demand may change. Already there is
talk of how we will not go back to what we were doing before COVID-19 struck.
People may adjust to more home-working, including commuting to a central office
but far less frequently. This would have two implications (apart from those it
would have for the demand for office space): the first would be that people
would demand more space in their houses; the second is that commuting costs
might become less important. These would suggest a movement outwards to find
cheaper land and space, and accept the longer commute that implied. In fact
before COVID-19 struck there was already evidence of people <a href="http://eprints.lse.ac.uk/90240/">jumping the
Green Belt</a> so this would be a continuation of an existing
trend.<o:p></o:p></span></div>
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<span style="font-family: inherit; font-size: medium;">Although not strictly following (maybe we
should have another blog to explain the reasons) a further related trend might
be for higher-paid jobs to concentrate even more strongly in the first-order
cities, notably London, Manchester, Edinburgh, even Leeds, at the expense of
second-tier cities like Stoke-on-Trent, Derby or Coventry; and demand for
housing to relatively increase in smaller but well connected high-amenity cities
like Cambridge, Canterbury, Exeter, Harrogate, Hexham or Norwich, further
increasing house price pressures in these locations.<o:p></o:p></span></div>
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<span style="font-family: inherit; font-size: medium;"><br /></span></div>
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<span style="font-family: inherit; font-size: medium;">While there is huge uncertainty surrounding the
COVID-19 crisis - not just its impact on the real economy, the financial
markets and the rate of recovery but also longer-term political consequences or
the impact on globalisation - one thing is clear: COVID-19 is likely to have
lasting effects on both Britain’s housing markets and housing policies. Real
house prices (and rents) may fall in the short- and medium-term without making
housing less unaffordable. It will remain particularly unaffordable for the
young and those on lower incomes, especially in London and the South East, and
for those hardest-hit by COVID-19. When it comes to housing policies, Britain’s
policy makers (of all colours) would be well-advised not to jump on the
populist band-wagon. There needs to be a policy reaction reflecting the true
causes rather than the symptoms of the affordability crisis and the longer-term
reforms that are the only way of truly resolving our housing problems. We need
to learn from Germany, not just in terms of <a href="https://www.bbc.com/news/health-52234061">effective
testing</a> for COVID-19, but also from their <a href="http://eprints.lse.ac.uk/57272/">housing and
planning policies</a>. <o:p></o:p></span></div>
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<span style="font-family: inherit; font-size: medium;"><a href="file:///D:/Files/Documents/Spatial%20Centre/Blogs/COVID%20housing%20blog%20v15%20(1).docx#_ftnref1" name="_ftn1" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference">[1]</span><!--[endif]--></span></a><span style="font-family: "arial" , "helvetica" , sans-serif;"> </span><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="background-color: white;"><a href="https://www.telegraph.co.uk/news/2020/03/17/governments-hopeful-scenario-20000-people-will-die-coronavirus/" target="_blank">Britain’s Chief Scientific Advisor</a> mentioned a death toll of 20,000 as “a good outcome”. </span><span style="background-color: white;">If 25% of Britain’s population were to eventually catch COVID-19 and 1% die, this would amount to a death toll of nearly 170,000. If half the population were to catch COVID-19, the death toll could in theory exceed 330,000. This however seems highly unlikely, not least because a vaccine is likely to become available prior to half of the population having been infected. Moreover, new medicine may lower the death rate to well below 1%</span><span style="background-color: white; color: red;">.</span> </span><span style="font-family: "arial" , "helvetica" , sans-serif;"><o:p></o:p></span></span></div>
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<br />Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-53414551179937378332019-12-17T17:56:00.000+00:002019-12-17T19:06:17.897+00:00Housing: ‘no shortage’ – is it nonsense?<br />
<br />
<h3>
by Paul Cheshire, Professor of Economic Geography, LSE.</h3>
<br />
To any reasonable observer, the evidence that Britain is suffering from a housing shortage of crisis proportions seems clear-cut. It is obvious looking at the data that there has been a critical problem of underbuilding for a generation or more. New housing supply is best measured as how many houses are built – ‘completions’. In the 30 years 1959-1988, 7,449,160 houses were built in England: in the 30 years 1989-2018, only 3,328,850. That suggests a shortfall of 3,120,310 homes over the last 30 years relative to the previous trend. Other measures, against, for example, estimates of annual building rates needed to maintain affordability, suggest underbuilding has been even worse.<br />
<br />
Nor are houses like barrels of Brent Crude – all the same. Location and size are critical and we have been systematically building the wrong sort of houses (too small) in the wrong sort of places. Demand is for roomier houses in areas close to productive jobs. Instead we have been building relatively more houses where the local economy is depressed (but there is lots of brownfield land) and population growth minimal. Compare Barnsley and Doncaster with Oxford and Cambridge: <a href="http://eprints.lse.ac.uk/102339/" target="_blank">population growth and house building</a>, show exactly the reverse pattern to that which logic would demand. In the nearly 40 years from 1980 to 2018, 56,340 houses were built in Barnsley and Doncaster combined but only 29,430 in the combined Cambridge and Oxford. The pattern of relative population growth was almost the reverse: a 95,079 increase in Oxbridge against a 29,430 increase in the Barnsley and Doncaster pair. The wider symptoms and causes of our housing crisis were addressed in a recent <a href="http://cep.lse.ac.uk/pubs/download/ea051.pdf" target="_blank">CEP Election Analysis</a>.<br />
<br />
Despite this, the assertion that England does not really have a shortage of houses has gained some traction. The “no shortage” message is a comforting narrative and appeals to vested interests. To politicians because it implies that nothing as uncomfortable as building more houses needs to done to address our housing crisis. To big developers because it implies we do not need to radically reform our housing delivery system from which the biggest developers benefit so much. The ‘no shortage’ claim originated from Ian Mulheirn, an economic consultant for the <a href="https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=2ahUKEwjgsOXS4rzmAhUITxUIHZKhD_IQFjACegQIBBAC&url=https%3A%2F%2Fbritainthinks.com%2Fpdfs%2FTW082_RR_online_PDF.pdf&usg=AOvVaw2r-ny9CkDro1lWxu6hATuE" target="_blank">Redfern Review</a> into the decline of homeownership. Its most recent articulation appeared in <a href="https://housingevidence.ac.uk/publications/tackling-the-uk-housing-crisis-is-supply-the-answer/" target="_blank">another report</a> by Ian Mulheirn in August 2019.<br />
<br />
The claim rests on two basic pieces of ‘evidence’. The first is that the number of dwellings has risen (since some particular date – in the August 2019 paper – 1996) at a faster rate than the number of households. The second is that rents have not risen in real terms since 2005 and, since rents are the price of ‘housing services’, we should conclude there cannot be a shortage of housing.<br />
<br />
The first claim embodies at least three errors. The first is the use of Net Additional Dwellings rather than Completions as the measure of additional housing supply. The chart reproduced on page 9 of the <a href="https://housingevidence.ac.uk/publications/tackling-the-uk-housing-crisis-is-supply-the-answer/" target="_blank">report</a> by Ian Mulheirn showing how the volume of building (Completions) and Net Additional Dwellings has varied since 1971, in fact, reveals the problem. Net Additional Dwellings is calculated by adding Completions, conversions/ subdivisions and changes of use into residential and then subtracting the number of houses demolished.<br />
<br />
When building new homes was flourishing, as in the 1970s, Completions exceeded Net Additional Dwellings by about 25% as obsolete homes were replaced. From about 1980 until the late 1990s – ignoring the four year boom of the late 1980s – the two measures gave a very similar picture of new supply. More obsolete houses were kept in use or older houses subdivided. From the late 1990s, however, as real shortages bit these trends went further: annual Completions started to fall behind, so that by 2018-19 they were 12% less than the sum of Net Additional Dwellings. Demolitions had all but ceased but conversions and the transformation of obsolete office buildings into sub-standard houses, had soared, boosting Net Additions compared to new homes built. In other words, the worse the shortage, the more Completions fall behind Net Additional Dwellings as a measure of new supply.<br />
<br />
The second error is related and arises from the simple definition of a household. ‘Households’ are groups of people living in a dwelling. If there are not enough houses, then households do not form. The Census defines a household as one person living alone or two or more people living at the same address and sharing at least one room. Thus there is an almost definitional identity between the number of households and the number of addresses: or dwellings. As Liam Halligan points out in his recent book, <a href="https://www.bitebackpublishing.com/books/home-truths" target="_blank">Home Truths</a>, there has been a rapid rise in the number of ‘concealed households’: for example younger adults living with their parents. Between 2006 and 2016 he reports that there was a 47 percent increase in the number of 20 to 34 year-olds doing this.<br />
<br />
The third error is that whether or not there is shortage of houses is an economic issue and results from the interaction of supply with demand. That there were more houses per household in 2015 than there had been in 1971 is not relevant to the issue of an economic shortage of houses. The same is true of doctors. According to the <a href="https://data.worldbank.org/indicator/SH.MED.PHYS.ZS?locations=GB" target="_blank">World Bank</a>, the number of doctors per thousand people increased from 1 in 1971 to 2.8 2015. By comparison houses to households hardly increased at all: from 1 to 1.02 (England).<br />
<br />
Despite the near tripling of the number of doctors per person no one is asserting there is a surplus of doctors. As people get richer they demand more health care; that also happens as they get older. The ability of doctors to treat illness has greatly improved. It takes more doctors to treat cancer patients now than in 1971, partly because treatment can do so much more. The rising ratio of doctors to people reflects rising prosperity, the aging population and technical progress complementary to the demand for doctors: not a surplus of doctors.<br />
<br />
Much the same is true of houses. One of the inconvenient facts about the demand for houses is not just that <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1468-0084.00104" target="_blank">as people get richer they demand more housing space</a>, but they also demand more as they get older. Even after adjusting for income, education and other relevant factors, <a href="https://www.sciencedirect.com/science/article/pii/S1051137714000321" target="_blank">older people demand more housing space</a>. As car ownership has grown, people demand more space around their houses. As society has aged and become more prosperous over the past 50 years one would expect that the consumption of houses and housing space would have increased substantially. But it did not because we did not build enough houses and the stock could not adjust to the changing pattern of demand.<br />
<br />
What we observe is an aging stock of increasingly cramped housing. In 1967, 62.1 percent of English houses were less than 50 years old: in 2015 that had shrunk to 38.8 percent: not much more than the proportion that were less than 25 years old in 1945 – despite WWII. English houses are akin to Cuban cars: they are still in use but they are clapped out and polluting.<br />
<br />
Thus the evidence of the physical stock of housing and the rate at which we have been adding to it speaks overwhelmingly of an increasing shortage: of very serious underbuilding over a long period and a systematic process of building not where demand is strongest but where there is least NIMBY resistance.<br />
<br />
The other ‘evidence’ cited to support the ‘no shortage’ narrative is that rents have not risen significantly since 2005. But people buy houses not just as places to live (providing a flow of housing services), but as an investment, for their pensions. Demand for houses reflects both types of motive but the relative importance of the motives for buying a house - as an investment asset or just somewhere to live - varies according to the rate of return from housing relative to that from other assets.<br />
<br />
The total return from an asset is the combination of its rate of capital appreciation and the annual payments the owner gets (interest, dividends, rents or ‘user value’ from the flow of housing services). The two generational freeze on land supply and the now more than 30 years of underbuilding this has caused, coupled with rising demand driven mainly by growth in real incomes, has put long term upward pressure on the price of houses. The real price of houses has more or less doubled in England in every decade since the 1950s. The <a href="http://personal.lse.ac.uk/hilber/hilber_wp/Hilber_Vermeulen_EJ_forthcoming.pdf" target="_blank">rate of house price increase</a> in the UK since 1975 has been faster than in any other OECD country and faster in England than in the UK as a whole.<br />
<br />
The end result is that returns from housing – as an investment – have outperformed almost all other assets. As a percentage of total household net worth, <a href="https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/datasets/thenationalbalancesheetestimates/current" target="_blank">houses plus land have increased</a> from 40.7% in 1995 to 53.0% in 2018 . The British preoccupation with house prices and popularity of buy-to-let reflects this increasingly important role of housing as an investment asset: and that is even more important for ordinary people who may not have easy access to government bonds or shares. As I pointed out in 2014, with their policy-imposed <a href="http://cep.lse.ac.uk/pubs/download/cp421.pdf" target="_blank">long term restrictions on housing supply</a>, the British have performed a feat of alchemy, converting houses into gold. It is a small investors’ speciality: most landlords still own just one rental property.<br />
<br />
Rents are the price of the flow of housing services a given house generates. Rents relative to the price of a house represent its yield as an investment. The price paid for a house includes both the present discounted value of those services or rents and their expected future price appreciation. There may also but perhaps be some judgement about future capital values relative to rents. In investment jargon the future yield on housing relative to other assets. The long run shortage and consequent price increases may itself cause an expectation of future relative appreciation so lead to higher house prices in the present.<br />
<br />
Which brings one to the question of yields on housing and their level relative to those on other investment assets – now or in the future. This is at the heart of the claimed puzzle of rents not rising since 2005. What is known beyond doubt is that the response to the financial crisis was an unprecedented expansion of credit. Bond yields fell to historic lows where they have remained. The yield on 10-year Treasury bonds used to bump along between 4 to 8 percent but since 2010 has fallen steadily to below 1 percent. This has been followed by similar falls in yields on other investments assets, such as equities or commercial property. Yields on offices, typically 5 to 6.5 percent in the 1990s, were down to 4 percent or less by 2019. That yields on housing have fallen roughly in line, especially given the attraction of buy-to-let houses in Britain as pensions, should come as no surprise. Rents have not been boosted by an increase in the demand for housing services since 2005 because <a href="http://cep.lse.ac.uk/pubs/download/ea046.pdf" target="_blank">real incomes have not risen</a>. They are still lower than their 2006 peak. But rents do not buy a house and house prices have risen, adjusting to the new reality of yields.<br />
<br />
<a href="https://www.bitebackpublishing.com/books/home-truths" target="_blank">Liam Halligan</a> claims that the no shortage narrative is just nonsense. It is nonsense: but perhaps not just nonsense. It seems more like fake news. Nonsense is innocently wrong or even, as in Nonsense Verse, funny. The claim that there is no shortage seems less innocent, more self-serving.<br />
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Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-74463685671606142272019-08-29T13:03:00.001+01:002019-08-30T12:10:12.494+01:00Dirty Density: Air Quality and the Density of American Cities<div dir="ltr" style="text-align: left;" trbidi="on">
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<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Bullet"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Number"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List 4"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List 5"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Bullet 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Bullet 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Bullet 4"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Bullet 5"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Number 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Number 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Number 4"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Number 5"/>
<w:LsdException Locked="false" Priority="10" QFormat="true" Name="Title"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Closing"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Signature"/>
<w:LsdException Locked="false" Priority="1" SemiHidden="true"
UnhideWhenUsed="true" Name="Default Paragraph Font"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text Indent"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Continue"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Continue 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Continue 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Continue 4"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Continue 5"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Message Header"/>
<w:LsdException Locked="false" Priority="11" QFormat="true" Name="Subtitle"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Salutation"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Date"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text First Indent"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text First Indent 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Note Heading"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text Indent 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text Indent 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Block Text"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Hyperlink"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="FollowedHyperlink"/>
<w:LsdException Locked="false" Priority="22" QFormat="true" Name="Strong"/>
<w:LsdException Locked="false" Priority="20" QFormat="true" Name="Emphasis"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Document Map"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Plain Text"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="E-mail Signature"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Top of Form"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Bottom of Form"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Normal (Web)"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Acronym"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Address"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Cite"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Code"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Definition"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Keyboard"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Preformatted"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Sample"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Typewriter"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Variable"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Normal Table"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="annotation subject"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="No List"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Outline List 1"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Outline List 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Outline List 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Simple 1"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Simple 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Simple 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Classic 1"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Classic 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Classic 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Classic 4"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Colorful 1"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Colorful 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Colorful 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 1"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 4"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 5"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 1"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 4"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 5"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 6"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 7"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 8"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 1"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 4"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 5"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 6"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 7"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 8"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table 3D effects 1"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table 3D effects 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table 3D effects 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Contemporary"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Elegant"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Professional"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Subtle 1"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Subtle 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Web 1"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Web 2"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Web 3"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Balloon Text"/>
<w:LsdException Locked="false" Priority="39" Name="Table Grid"/>
<w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Theme"/>
<w:LsdException Locked="false" SemiHidden="true" Name="Placeholder Text"/>
<w:LsdException Locked="false" Priority="1" QFormat="true" Name="No Spacing"/>
<w:LsdException Locked="false" Priority="60" Name="Light Shading"/>
<w:LsdException Locked="false" Priority="61" Name="Light List"/>
<w:LsdException Locked="false" Priority="62" Name="Light Grid"/>
<w:LsdException Locked="false" Priority="63" Name="Medium Shading 1"/>
<w:LsdException Locked="false" Priority="64" Name="Medium Shading 2"/>
<w:LsdException Locked="false" Priority="65" Name="Medium List 1"/>
<w:LsdException Locked="false" Priority="66" Name="Medium List 2"/>
<w:LsdException Locked="false" Priority="67" Name="Medium Grid 1"/>
<w:LsdException Locked="false" Priority="68" Name="Medium Grid 2"/>
<w:LsdException Locked="false" Priority="69" Name="Medium Grid 3"/>
<w:LsdException Locked="false" Priority="70" Name="Dark List"/>
<w:LsdException Locked="false" Priority="71" Name="Colorful Shading"/>
<w:LsdException Locked="false" Priority="72" Name="Colorful List"/>
<w:LsdException Locked="false" Priority="73" Name="Colorful Grid"/>
<w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 1"/>
<w:LsdException Locked="false" Priority="61" Name="Light List Accent 1"/>
<w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 1"/>
<w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 1"/>
<w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 1"/>
<w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 1"/>
<w:LsdException Locked="false" SemiHidden="true" Name="Revision"/>
<w:LsdException Locked="false" Priority="34" QFormat="true"
Name="List Paragraph"/>
<w:LsdException Locked="false" Priority="29" QFormat="true" Name="Quote"/>
<w:LsdException Locked="false" Priority="30" QFormat="true"
Name="Intense Quote"/>
<w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 1"/>
<w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 1"/>
<w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 1"/>
<w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 1"/>
<w:LsdException Locked="false" Priority="70" Name="Dark List Accent 1"/>
<w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 1"/>
<w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 1"/>
<w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 1"/>
<w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 2"/>
<w:LsdException Locked="false" Priority="61" Name="Light List Accent 2"/>
<w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 2"/>
<w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 2"/>
<w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 2"/>
<w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 2"/>
<w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 2"/>
<w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 2"/>
<w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 2"/>
<w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 2"/>
<w:LsdException Locked="false" Priority="70" Name="Dark List Accent 2"/>
<w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 2"/>
<w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 2"/>
<w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 2"/>
<w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 3"/>
<w:LsdException Locked="false" Priority="61" Name="Light List Accent 3"/>
<w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 3"/>
<w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 3"/>
<w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 3"/>
<w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 3"/>
<w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 3"/>
<w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 3"/>
<w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 3"/>
<w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 3"/>
<w:LsdException Locked="false" Priority="70" Name="Dark List Accent 3"/>
<w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 3"/>
<w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 3"/>
<w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 3"/>
<w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 4"/>
<w:LsdException Locked="false" Priority="61" Name="Light List Accent 4"/>
<w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 4"/>
<w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 4"/>
<w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 4"/>
<w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 4"/>
<w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 4"/>
<w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 4"/>
<w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 4"/>
<w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 4"/>
<w:LsdException Locked="false" Priority="70" Name="Dark List Accent 4"/>
<w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 4"/>
<w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 4"/>
<w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 4"/>
<w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 5"/>
<w:LsdException Locked="false" Priority="61" Name="Light List Accent 5"/>
<w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 5"/>
<w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 5"/>
<w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 5"/>
<w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 5"/>
<w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 5"/>
<w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 5"/>
<w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 5"/>
<w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 5"/>
<w:LsdException Locked="false" Priority="70" Name="Dark List Accent 5"/>
<w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 5"/>
<w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 5"/>
<w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 5"/>
<w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 6"/>
<w:LsdException Locked="false" Priority="61" Name="Light List Accent 6"/>
<w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 6"/>
<w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 6"/>
<w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 6"/>
<w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 6"/>
<w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 6"/>
<w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 6"/>
<w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 6"/>
<w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 6"/>
<w:LsdException Locked="false" Priority="70" Name="Dark List Accent 6"/>
<w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 6"/>
<w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 6"/>
<w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 6"/>
<w:LsdException Locked="false" Priority="19" QFormat="true"
Name="Subtle Emphasis"/>
<w:LsdException Locked="false" Priority="21" QFormat="true"
Name="Intense Emphasis"/>
<w:LsdException Locked="false" Priority="31" QFormat="true"
Name="Subtle Reference"/>
<w:LsdException Locked="false" Priority="32" QFormat="true"
Name="Intense Reference"/>
<w:LsdException Locked="false" Priority="33" QFormat="true" Name="Book Title"/>
<w:LsdException Locked="false" Priority="37" SemiHidden="true"
UnhideWhenUsed="true" Name="Bibliography"/>
<w:LsdException Locked="false" Priority="39" SemiHidden="true"
UnhideWhenUsed="true" QFormat="true" Name="TOC Heading"/>
<w:LsdException Locked="false" Priority="41" Name="Plain Table 1"/>
<w:LsdException Locked="false" Priority="42" Name="Plain Table 2"/>
<w:LsdException Locked="false" Priority="43" Name="Plain Table 3"/>
<w:LsdException Locked="false" Priority="44" Name="Plain Table 4"/>
<w:LsdException Locked="false" Priority="45" Name="Plain Table 5"/>
<w:LsdException Locked="false" Priority="40" Name="Grid Table Light"/>
<w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light"/>
<w:LsdException Locked="false" Priority="47" Name="Grid Table 2"/>
<w:LsdException Locked="false" Priority="48" Name="Grid Table 3"/>
<w:LsdException Locked="false" Priority="49" Name="Grid Table 4"/>
<w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark"/>
<w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful"/>
<w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful"/>
<w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 1"/>
<w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 1"/>
<w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 1"/>
<w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 1"/>
<w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 1"/>
<w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 1"/>
<w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 1"/>
<w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 2"/>
<w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 2"/>
<w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 2"/>
<w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 2"/>
<w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 2"/>
<w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 2"/>
<w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 2"/>
<w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 3"/>
<w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 3"/>
<w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 3"/>
<w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 3"/>
<w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 3"/>
<w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 3"/>
<w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 3"/>
<w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 4"/>
<w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 4"/>
<w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 4"/>
<w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 4"/>
<w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 4"/>
<w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 4"/>
<w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 4"/>
<w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 5"/>
<w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 5"/>
<w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 5"/>
<w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 5"/>
<w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 5"/>
<w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 5"/>
<w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 5"/>
<w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 6"/>
<w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 6"/>
<w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 6"/>
<w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 6"/>
<w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 6"/>
<w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 6"/>
<w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 6"/>
<w:LsdException Locked="false" Priority="46" Name="List Table 1 Light"/>
<w:LsdException Locked="false" Priority="47" Name="List Table 2"/>
<w:LsdException Locked="false" Priority="48" Name="List Table 3"/>
<w:LsdException Locked="false" Priority="49" Name="List Table 4"/>
<w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark"/>
<w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful"/>
<w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful"/>
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<br />
<div class="MsoNormal" style="margin-left: 18.0pt; text-align: justify; text-indent: 18.0pt;">
<span style="color: #444444;"><span style="font-family: "palatino linotype" , serif;">Air pollution tends
to be worst in large cities and their urban cores. As a result, it is urban air
pollution that makes the headlines when the media report on pollution and its
effects (see, for example, </span><a href="https://www.standard.co.uk/futurelondon/cleanair/high-pollution-levels-detected-by-40-of-londons-air-quality-sensor-networks-a4196811.html"><span style="font-family: "palatino linotype" , serif;">this</span></a><span style="font-family: "palatino linotype" , serif;">, </span><a href="https://elpais.com/elpais/2019/07/11/inenglish/1562829294_423030.html"><span style="font-family: "palatino linotype" , serif;">this</span></a><span style="font-family: "palatino linotype" , serif;"> and </span><a href="https://www.theguardian.com/world/2019/jul/02/jakarta-residents-to-sue-government-over-severe-air-pollution"><span style="font-family: "palatino linotype" , serif;">this</span></a><span style="font-family: "palatino linotype" , serif;">).<span style="mso-spacerun: yes;"> </span>Since it is mainly an urban problem, air
pollution exposure is shaped by urban planning and policy. In particular,
it can be affected by population density, the defining feature of urbanization
that distinguishes cities from smaller towns and villages. </span></span></div>
<div class="MsoNormal" style="margin-left: 18.0pt; text-align: justify;">
<span style="color: #444444;"><span style="font-family: "palatino linotype" , serif;">In a recent </span><a href="http://cep.lse.ac.uk/pubs/download/dp1635.pdf"><span style="font-family: "palatino linotype" , serif;">paper</span></a><span style="font-family: "palatino linotype" , serif;">
we study how air pollution - as measured by fine particulate matter (PM2.5)
concentration - is shaped by cities’ population density in the United States. In
particular, we want to find out whether residents in dense urban areas are
exposed to worse air quality. For this purpose, we use new data on
satellite-derived measures of PM2.5 concentration at a fine spatial scale and
demographic information from the US census. </span></span></div>
<div class="MsoNormal" style="margin-left: 18.0pt; text-align: justify;">
<span style="color: #444444;"><span style="font-family: "palatino linotype" , serif;">Intuitively, our analysis is
conducted by comparing cities of different densities and their average
concentration of PM2.5. The resulting scatter plot is provided in Figure 1 and
serves to illustrate our main result: denser cities tend to have worse air
quality. But this naïve approach cannot give us a definitive (causal) answer on
whether population density affects air pollution. Why? Because many confounding
factors can bias the associated estimates. For example, people decide on where
to locate based on various factors including local amenities and
employment opportunities. Given that many productive activities (e.g.
factories) generate pollution; if people move into areas close to these
activities, a naïve estimation which ignores these confounders will overstate
the true effect of density on pollution. </span></span></div>
<div class="MsoNormal" style="margin-left: 18.0pt; text-align: justify;">
<br /></div>
<div align="center" class="MsoNormal" style="margin-left: 18.0pt; text-align: center;">
<span style="color: #444444;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "palatino linotype" , serif;">Figure
1 – PM2.5 Concentration and Population Density</span></b></span></div>
<div class="separator" style="clear: both; text-align: center;">
<span style="color: #444444;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIWhDPo_aj2Ar2wBBcz14eZ3xrB6LCpjFw-ntM-P0ylL-E4NGsQEipfpdHFEv-nO_cyTpSIyXiRvFtm9CDfTqUPJXIB4rkTvxgJfYzfnAZoy0YgyaKLw8OjdDE5bHHOlKvGmml8Be2x1EI/s1600/Scatter_pm25_density1.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="801" data-original-width="1101" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIWhDPo_aj2Ar2wBBcz14eZ3xrB6LCpjFw-ntM-P0ylL-E4NGsQEipfpdHFEv-nO_cyTpSIyXiRvFtm9CDfTqUPJXIB4rkTvxgJfYzfnAZoy0YgyaKLw8OjdDE5bHHOlKvGmml8Be2x1EI/s400/Scatter_pm25_density1.png" width="400" /></a></span></div>
<div align="center" class="MsoNormal" style="margin-left: 18.0pt; text-align: center;">
<span style="color: #444444;"><span style="font-family: "palatino linotype" , serif; mso-fareast-language: EN-GB; mso-no-proof: yes;"><br /></span><span style="font-family: "palatino linotype" , serif;"></span></span></div>
<div class="MsoNormal" style="margin-left: 18.0pt; text-align: justify;">
<span style="color: #444444;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "palatino linotype" , serif;">Note:</span></b><span style="font-family: "palatino linotype" , serif;"> The vertical
axis represents PM2.5 average residential exposure (in μg /m<sup>3</sup>),
as obtained from the satellite-derived measures. The
horizontal axis represents the natural logarithm of population density. The
points represent 933 CBSAs (metro and micropolitan areas). The black line is
estimated by OLS using the underlying data.</span></span></div>
<div class="MsoNormal" style="margin-left: 18.0pt; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="margin-left: 18.0pt; text-align: justify;">
<span style="color: #444444;"><span style="font-family: "palatino linotype" , serif;">To deal with this and other
endogeneity issues, we use data on the geological characteristics at and around
US cities as instrumental variables for density. Intuitively, we use these
variables to generate variation in density that is not shaped by pollution or
other confounders.<a href="https://www.blogger.com/blogger.g?rinli=1&pli=1&blogID=974562301377041914#_ftn1" name="_ftnref1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: "palatino linotype" , serif; font-size: 11.0pt; line-height: 107%;">[1]</span></span></span></span></a>
Our instrumental variable estimates confirm the message in Figure 1: denser
locations are associated with higher concentrations of PM2.5. How much higher?
Quite a bit. According to our estimates, doubling density – say, increasing the
density in Houston to match that of Chicago – increases PM2.5 concentrations by
0.73 μg/m3, which is roughly 10% of the average pollution across cities. Using
well-established dose-response functions that map pollution concentration to
mortality rates, in conjunction with official mortality costs estimates from
the US Environmental Protection Agency, we find that doubling densities would
lead to annual mortality costs of as much as USD 630 per capita.</span></span></div>
<div class="MsoNormal" style="margin-bottom: 8.0pt; margin-left: 18.0pt; margin-right: 0cm; margin-top: 12.0pt; text-align: justify;">
<span style="color: #444444;"><span style="font-family: "palatino linotype" , serif;">So
denser cities lead to higher pollutant concentration. But was it not the case
that denser cities are also greener? A prolific strand of research has
emphasized the environmental advantages of denser cities (see Kahn and Walsh
2015 for a review). In dense cities, households enjoy shorter commutes when
driving to work (Duranton and Turner 2017) and may even switch to other
transport modes when these are available (Cervero and Guerra 2011). In a world
in which a significant amount of emissions is generated by transport –
especially driving – this observation has led to the conclusion that denser cities
are also greener (see Glaeser and Kahn 2010). <span style="mso-bidi-font-weight: normal;">But our results indicate that this should not be interpreted as meaning
that high density leads to better air quality. Yes, denser cities are
associated with lower emissions, and this is important for reducing global
greenhouse gas concentrations. However, if we are concerned about local air
quality, having lower emissions does not suffice. Even if emissions are low in
denser cities, it is the concentration of pollutants that determines local
pollution levels. Our paper shows that pollution exposure is higher in denser
cities, making the environmental quality in these cities lower than in other
locations.<a href="https://www.blogger.com/blogger.g?rinli=1&pli=1&blogID=974562301377041914#_ftn2" name="_ftnref2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="mso-bidi-font-weight: normal;"><span style="font-family: "palatino linotype" , serif; font-size: 11.0pt; line-height: 107%;">[2]</span></span></span></span></span></a></span>
</span></span></div>
<div class="MsoNormal" style="margin-left: 18.0pt; text-align: justify;">
<span style="color: #444444;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "palatino linotype" , serif;">What
should be done?</span></b></span></div>
<div class="MsoNormal" style="margin-left: 18.0pt; text-align: justify; text-indent: 18.0pt;">
<span style="color: #444444;"><span style="font-family: "palatino linotype" , serif;">For decades now,
the compact city urban planning approach has been promoting urban densification
as a way to contain sprawl, reduce car use and promote some of the beneficial
agglomeration forces normally associated with density. There are many things to
enjoy about compact cities, including shorter commutes and better access to
commercial and recreational activities. Yet our results indicate that the
purposed environmental advantages of compactness may be limited to reductions
in global pollutants. When it comes to our lungs and hearts, denser cities
create a more polluted, harmful environment. Urban planners should take note of
these trade-offs when designing the cities of the future. </span></span></div>
<div class="MsoNormal" style="margin-left: 18.0pt; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="margin-left: 18.0pt; text-align: justify;">
<span style="color: #444444;"><b style="mso-bidi-font-weight: normal;"><span lang="ES" style="font-family: "palatino linotype" , serif; font-size: x-small; mso-ansi-language: ES; mso-bidi-font-family: "Calibri Light"; mso-bidi-theme-font: major-latin;">References: </span></b></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 18.0pt; margin-right: 0cm; margin-top: 0cm;">
<span style="color: #444444; font-size: x-small;"><span lang="ES" style="font-family: "palatino linotype" , serif; mso-ansi-language: ES; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB;">Cervero, R., & Guerra, E. (2011). </span><i><span style="font-family: "palatino linotype" , serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB;">Urban densities and transit: A
multi-dimensional perspective</span></i><span style="font-family: "palatino linotype" , serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB;">. Institute of Transportation Studies, University
of California, Berkeley.</span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: 6.0pt; margin-left: 18.0pt; margin-right: 0cm; margin-top: 6.0pt;">
<span style="color: #444444; font-size: x-small;"><span style="background: white none repeat scroll 0% 0%; font-family: "palatino linotype" , serif;">Combes, P. P., Duranton, G., Gobillon, L.,
& Roux, S. (2010). </span><span lang="EN-US" style="background: white none repeat scroll 0% 0%; font-family: "palatino linotype" , serif;">Estimating
Agglomeration Economies with History, Geology, and Worker Effects.
Agglomeration Economics, 15.</span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: 6.0pt; margin-left: 18.0pt; margin-right: 0cm; margin-top: 6.0pt;">
<span style="color: #444444;"><span lang="EN-US" style="background: white none repeat scroll 0% 0%; font-family: "palatino linotype" , serif; font-size: x-small;">Combes, P.
P., & Gobillon, L. (2015). The empirics of agglomeration economies. In H<span style="display: none; mso-hide: all;">H</span>andbook of regional and urban
economics (Vol. 5, pp. 247-348). Elsevier.</span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: 6.0pt; margin-left: 18.0pt; margin-right: 0cm; margin-top: 6.0pt;">
<span style="color: #444444;"><span lang="EN-US" style="background: white none repeat scroll 0% 0%; font-family: "palatino linotype" , serif; font-size: x-small;">Duranton,
G., & Turner, M. A. (2018). Urban form and driving: Evidence from US
cities. Journal of Urban Economics, 108, 170-191.</span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: 6.0pt; margin-left: 18.0pt; margin-right: 0cm; margin-top: 6.0pt;">
<span style="color: #444444;"><span lang="EN-US" style="background: white none repeat scroll 0% 0%; font-family: "palatino linotype" , serif; font-size: x-small;">Glaeser, E.
L., & Kahn, M. E. (2010). The greenness of cities: carbon dioxide emissions
and urban development. Journal of Urban Economics, 67(3), 404-418.</span></span></div>
<div class="MsoNormal" style="margin-left: 18.0pt; text-align: justify;">
<span style="color: #444444;"><span lang="EN-US" style="background: white none repeat scroll 0% 0%; font-family: "palatino linotype" , serif; font-size: x-small;">Kahn, M. E., & Walsh, R. (2015). Cities and the
Environment. In Handbook of regional and urban economics (Vol. 5, pp.
405-465). Elsevier.</span><span lang="EN-US" style="font-family: "palatino linotype" , serif; mso-ansi-language: EN-US; mso-bidi-font-family: "Calibri Light"; mso-bidi-theme-font: major-latin;"></span></span></div>
<div class="MsoNormal">
<br /></div>
<div style="mso-element: footnote-list;">
<span style="color: #444444;"><br clear="all" /></span>
<br />
<hr align="left" size="1" width="33%" />
<div id="ftn1" style="mso-element: footnote;">
<div class="MsoFootnoteText">
<span style="color: #444444;"><a href="https://www.blogger.com/blogger.g?rinli=1&pli=1&blogID=974562301377041914#_ftnref1" name="_ftn1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: "calibri" , sans-serif; font-size: 10.0pt; line-height: 107%;">[1]</span></span></span></span></a> <span style="font-family: "palatino linotype" , serif;">This strategy was initially
developed in the agglomeration literature trying to estimate the productive
advantages of cities (see Combes et al. 2010, Combes and Gobillon 2015). In our
case, we use it to study one of the congestion forces that constrain city
growth.</span></span></div>
</div>
<div id="ftn2" style="mso-element: footnote;">
<div class="MsoFootnoteText">
<span style="color: #444444;"><a href="https://www.blogger.com/blogger.g?rinli=1&pli=1&blogID=974562301377041914#_ftnref2" name="_ftn2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: "calibri" , sans-serif; font-size: 10.0pt; line-height: 107%;">[2]</span></span></span></span></a> <span style="font-family: "palatino linotype" , serif;">Complementary results in the
paper show that the observed increase in PM2.5 is not driven by a different
sectoral composition of production in larger cities or by differences in total
city population. See details in the paper.</span></span></div>
</div>
</div>
</div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-83567759764291545292019-08-19T13:45:00.001+01:002019-08-19T13:45:54.525+01:00Why banning the construction of second homes in St. Ives and elsewhere has been a bad idea and what to do instead<h3 style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;">By Christian Hilber, LSE Department of Geography and Environment</span></h3>
<div style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;">c.hilber@lse.ac.uk</span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;">In May 2016
the local residents of St. Ives approved a referendum that stops newly built
houses in town from being used as a second home. A few other Cornish towns have
followed suit. And tourist destinations in other parts of the country are
contemplating similar policies. The <a href="https://www.economist.com/britain/2019/07/18/st-ivess-second-home-crackdown-has-unintended-consequences">Economist</a>,
the <a href="https://www.thetimes.co.uk/article/ban-on-second-homes-backfires-in-cornwall-nnn9mth32">Times</a>
and the <a href="https://www.bbc.co.uk/programmes/m0007nb9">BBC</a> recently pointed to unintended consequences of these
policies: higher prices for existing homes, less construction of newly built
homes and an adverse effect on the local economy—mainly tourist and
construction businesses. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;">In recent
research (<a href="http://cep.lse.ac.uk/pubs/download/cp543.pdf">here</a> and <a href="http://eprints.lse.ac.uk/91677/1/Hilber_The-economic-impacts-of-constraining_Author.pdf">here</a>
for the academic piece) we explored the economic impacts of banning the
construction of new second homes in the touristy parts of Switzerland. The
Swiss Second Home Initiative was approved in March 2012 and banned the
construction of new second homes in municipalities with more than 20% of such
homes. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;">There is one
crucial difference between the Swiss Alps and St. Ives. In the Swiss Alps,
primary and second homes are very different; think of wooden chalets near ski
lifts as second homes and stone or brick buildings near schools and stores as
primary homes. In St. Ives and other towns in Cornwall, primary and second
homes tend to be rather similar—they are close ‘substitutes’. This has
important implications. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;">When the ban
was introduced in Switzerland, demand of second home investors shifted
elsewhere, perhaps to the French or Austrian Alps. Unemployment rates started rising
and the price of primary homes started falling relative to the unaffected
areas. And because already built second homes became dearer (no new
construction allowed!), the price of these rose with the unintended consequence
of financially benefiting the owners. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;">In St. Ives,
where the typical primary and second home tend to be rather similar, demand of investors
shifted from newly built to existing homes, increasing the price of existing
homes and reducing the price of newly built ones. The emerging gap between the
two prices is the so called ‘conversion option’ of existing homes—the monetary
value of the option to convert a primary into a second home. Newly built homes
no longer possess such an option. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;">So it seems
the bans in Switzerland and Cornwall backfired. In the case of St. Ives,
existing housing has become even less affordable for young would-be buyers who
want to get their feet on the owner-occupied housing ladder, and, there is less
new construction of affordable housing. But also local firms, particularly
construction and tourism businesses and, importantly, their workforce, lose out.
If the ban intended to help young local residents who struggle to find decent
jobs and affordable homes, then it backfired spectacularly. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;">The ban in
St. Ives will likely not even succeed in improving the local community ‘character’.
One particular concern in tourist destinations like St. Ives is that they are
seasonal and thus, for much of the year, resemble ghost towns. The trouble with
the ban is that it does encourage second home investors to buy up existing
homes from local residents. Over time, St. Ives is thus set to become more—not
less—like a ghost town. Exactly what the ban intended to avoid. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;">The only
potential beneficiaries of the ban are already existing owners of housing in
St. Ives—owners of existing primary and second homes. They financially benefit
because their assets are higher in demand and thus become more valuable. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;">So what can
and should be done to address the legitimate concerns of local residents in
touristy places? <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;">First and
foremost, local policy makers and local residents have to ask themselves
whether they are really willing to accept and bear the long-run adverse
consequences associated with keeping second home investors out, namely, an
adverse effect on the local construction and tourism businesses. If (big if)
the answer is ‘yes’, then local authorities should consider alternative
policies to a ban. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;">A much better
policy would be a sizeable <i>annual local</i>
tax on the current value of second homes. <span class="wrap-break">Compared to a
ban on the construction of second homes, such a tax has important advantages.
First, it generates revenue for the local authority and this may be used to
provide or improve local public services for permanent residents—think of local
schools, libraries or social services. A ban, in contrast, generates zero
revenue and moreover limits the potential of local authorities to benefit from
Section 106 agreements</span>—private agreements between local authorities and
developers attached to a planning permission to make development, that would
otherwise be unacceptable, palatable to local authorities<span class="wrap-break">. Second, since the proposed tax has to be paid every year, it
discourages buying property for investment purposes. It makes the investment
less attractive financially. This will help with the affordability of existing
homes. A sizeable local annual tax will most effectively repel those investors
who consider second homes as pure investment and not as consumption. The second
home investors who still buy, mainly for consumption motives, can be expected to
be around more often. Seasonal tourist locations will look and feel less like
‘ghost towns’. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;">But why not
just a tax on the transfer of properties? The trouble is that the Stamp Duty
does not encourage second home investors to use the property more intensively.
In fact, the longer the investor holds the property, the less important, is the
Stamp Duty relative to the capital gain at point of sale. The same argument
applies to potential new second home investors. A rise in Stamp Duty will lead
to a small one-time downward adjustment in the price (reflecting the increased
anticipated tax burden). Once prices adjust, new second home investors may
still mainly consider expected capital gains and not the presumed consumption
value of the property. And it is important that the tax is <i>local</i> because otherwise it does not generate local tax revenue,
benefiting local residents.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span class="wrap-break"><span style="font-family: inherit;">Allowing local authorities to charge a multiple of the Council
Tax to second home investors may be a sensible ‘second best policy’ that is
clearly preferable to a ban. The trouble is, that the Council Tax is highly
regressive. It thus won’t much discourage wealthy investors from buying large underutilised
properties. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span style="font-family: inherit;"><i>How could the proposed policy work in
practice</i>? <span class="wrap-break">One could just take the last sale price of
a house (from the Land Registry) and the corresponding local house price index
to adjust the price to the current market price. The local authority could set
a tax rate on the so assessed current price. A high (low) tax would reduce
house prices significantly (moderately) but also strongly (only weakly)
adversely affect the local economy.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;">
<span class="wrap-break"><span style="font-family: inherit;">The political backlash against second home investors is not
confined to Cornwall or Switzerland. It is a worldwide phenomenon. There has <span style="color: #333333;">been a staggering amount of wealth accumulation among a
growing cohort of high earners that has led to a dramatic increase in second
home investments in the more desirable seasonal tourist areas worldwide (and in
‘superstar cities’ such as London). The ensuing political backlash has been
spreading quickly around the world. </span><o:p></o:p></span></span></div>
<span style="font-family: inherit;"><span class="wrap-break"><span style="color: #333333;">Second home investors are a
popular scapegoat—In Britain mainly for the ongoing housing affordability crisis.
However, the nation-wide crisis has little to do with second home investors. The
underlying causes are mainly a dysfunctional planning system and a lack of
fiscal incentives for local authorities to permit residential development (see </span></span><a href="http://cep.lse.ac.uk/pubs/download/ea033.pdf">here</a><span class="wrap-break"><span style="color: #333333;"> or </span></span><a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/ecoj.12213">here</a><span class="wrap-break"><span style="color: #333333;">). If national policy makers are
serious about addressing the national housing crisis, they should focus on the
underlying causes, otherwise, like the ban in St. Ives, their policies are
likely to backfire as well.</span></span></span>Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-8652492723200356922019-04-26T14:02:00.000+01:002019-04-26T14:02:42.883+01:00Financial innovation in mortgage products spurred the rapid increase in credit and house price growth during the last housing boom<br />
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm;">
<span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The dominance of the 30-year fixed
rate mortgage is a </span><span style="mso-bookmark: _Hlk6987430;"><span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><a href="https://www.aeaweb.org/articles?id=10.1257/089533005775196660" target="_blank">defining feature</a></span></span><span style="mso-bookmark: _Hlk6987430;"><span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> of the United States’ housing market.
For a brief period in the mid-2000s, however, this dominance was challenged by
the popularity of non-traditional mortgage products that allowed borrowers
easier access to credit through variable interest rates with teaser periods,
extended terms, and interest only or negatively amortizing repayment schedules.
In effect, borrowers could obtain a mortgage with lower monthly payments in the
short-term than were available through the 30-year fixed rate mortgage. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm;">
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<br /></div>
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<span style="mso-bookmark: _Hlk6987430;"><span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">As Figure
1 shows, the share of mortgages with at least one non-traditional feature grew
sharply during the last decade. At their peak in 2005, about sixty percent of
all purchase loans in the United States included at least one non-traditional
feature. Their coincidence with rapid house price appreciation during the
housing boom led many to conclude that they were used to speculate on the
housing market and, thus, partly to blame for the boom. However, </span></span><span style="mso-bookmark: _Hlk6987430;"><span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><a href="https://academic.oup.com/qje/article-abstract/124/4/1449/1917185" target="_blank">given that incomes rose little duringthat period</a></span></span><span style="mso-bookmark: _Hlk6987430;"><span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">,
borrowers may have instead flocked to non-traditional mortgage products to
maintain affordability in a time of increasing home prices.</span></span><span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p></o:p></span><br />
<span style="mso-bookmark: _Hlk6987430;"><span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><br /></span></span>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPK_50nGT_cwV0VgU-v1j5cL54UKTFcdDSqqzEBah8ZZjX_GsvL0VEpxlWzgUQpFGt9ZaKNrKDgQOCBglIzQm0ZE6hB6es61HW_4a-dKYnOz7VveSgW0hCYXcQrjyhVk_s8oIUoG_Cdqs/s1600/hpi_hpa.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1164" data-original-width="1600" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPK_50nGT_cwV0VgU-v1j5cL54UKTFcdDSqqzEBah8ZZjX_GsvL0VEpxlWzgUQpFGt9ZaKNrKDgQOCBglIzQm0ZE6hB6es61HW_4a-dKYnOz7VveSgW0hCYXcQrjyhVk_s8oIUoG_Cdqs/s400/hpi_hpa.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Figure 1 – Share of mortgages with non-traditional features and national house prices</td></tr>
</tbody></table>
<br />
In a new CEP Discussion Paper, <a href="http://cep.lse.ac.uk/_new/publications/abstract.asp?index=6196" target="_blank">Affordability, Financial Innovation and the Start of the Housing Boom</a> my coauthors and I study the relationship between the start of the housing boom and the use of non-traditional mortgages.</div>
<br />
To do so, we first identify the starts of housing booms in individual US counties. Figure 2 shows substantial variation in the timing and size of local house price booms. Next, we use this variability to systematically track the use of non-traditional mortgage products around the local housing boom starts. To illustrate, the house price index for Clark County (containing Las Vegas) is shown in Figure 3(a). Our methodology estimates that the Clark County housing boom began in February 2004. In the figure, there is a clear difference in the house price path and appreciation on either side of the estimated housing boom start. In Clark County, we find that the rapid adoption of non-traditional mortgage products began earlier than the estimated start of the local housing boom (shown in Figure 3(b)).<br />
<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXgyZI92WdmQdS7udmDHjPOeMeFuap8-OKTNnNAoqQeu-nasgLnb79RI1npAZiVsEyt0Azt_Wo413q_seWvOWWDSbRhiUQNujuD5gw_am6TmY4o1NNX3lfnpDPrBrHutS-LV3IYBZaaqI/s1600/dist_1break_magnitude.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1164" data-original-width="1600" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXgyZI92WdmQdS7udmDHjPOeMeFuap8-OKTNnNAoqQeu-nasgLnb79RI1npAZiVsEyt0Azt_Wo413q_seWvOWWDSbRhiUQNujuD5gw_am6TmY4o1NNX3lfnpDPrBrHutS-LV3IYBZaaqI/s400/dist_1break_magnitude.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Figure 2 – Distribution of House Price Breaks</td></tr>
</tbody></table>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjShGdT9qmffjCNYMnHT5YeYbSSUv62nzYMdgu8niZCmfteeEExj0ThLM6FUl3qjI-COHshkLhwpKc6EQeHkcQi3n4dV8QkRSbudWm5FCBUxRwcsynpMptRJhENvb86JMzkE5iU-OGw4QY/s1600/clark_county_a.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1164" data-original-width="1600" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjShGdT9qmffjCNYMnHT5YeYbSSUv62nzYMdgu8niZCmfteeEExj0ThLM6FUl3qjI-COHshkLhwpKc6EQeHkcQi3n4dV8QkRSbudWm5FCBUxRwcsynpMptRJhENvb86JMzkE5iU-OGw4QY/s400/clark_county_a.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Figure 3a - Clark County Estimated House Price Break and Non-traditional Mortgages, Estimated House Price Break</td></tr>
</tbody></table>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoDPy6EocYqqFG5UfIo-4bd8QT1rzyUEYJymHu5soEFVq9KDcDDVrx_0F32qtdGFPdV7UyxIk0La1Ahagfh_mUvMe3OyjxW9snJSRMVgyjn1pPD9Mu6O8sw45NQ3byZF68GubcAqvKa3w/s1600/clark_county_b.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1164" data-original-width="1600" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoDPy6EocYqqFG5UfIo-4bd8QT1rzyUEYJymHu5soEFVq9KDcDDVrx_0F32qtdGFPdV7UyxIk0La1Ahagfh_mUvMe3OyjxW9snJSRMVgyjn1pPD9Mu6O8sw45NQ3byZF68GubcAqvKa3w/s400/clark_county_b.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Figure 3b - Clark County Estimated House Price Break and Non-traditional Mortgages, Use of Alternative Mortgage Products</td></tr>
</tbody></table>
<br />
<div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm;">
<span style="mso-bookmark: _Hlk6987514;"><span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Like in the experience of Clark County, we find that the increased use of non-traditional mortgage products preceded the accelerated rise of house prices in markets with house price booms that began after the year 2000. In the year before, the share of new purchase mortgages with any non-traditional feature increased 5 percentage points on average, primarily due to the use of variable rate and interest-only mortgage products. Moreover, in late-booming markets, we find results consistent with <a href="https://www.sciencedirect.com/science/article/pii/S0304405X14002098" target="_blank">other findings</a>, that lenders altered their loan supply along dimensions that would be less frequently and consistently reported to investors, such as denial rates and the share of loans classified as subprime. Overall, these findings support the view that financial innovation in the 2000s contributed to rising house prices by reducing payment constraints. </span></span><span style="mso-bookmark: _Hlk6987514;"><span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman";"><span style="mso-spacerun: yes;"> </span></span></span></div>
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<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm;">
<span style="mso-bookmark: _Hlk6987514;"><span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A key
question regarding the county-level patterns we document is: what mechanism
drove the expansion of non-traditional mortgage products in markets after 2000?
To answer this question, we exploit the dramatic increase in Treasury rates in
mid-2003 for plausibly externally influenced variation in lenders' financing
constraints. </span></span><span style="mso-bookmark: _Hlk6987514;"><span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3209564" target="_blank">Earlier work</a></span></span><span style="mso-bookmark: _Hlk6987514;"><span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> shows that in response to the higher
Treasury rates and concurrent collapse of mortgage refinancings, lenders
rapidly expanded their use of the private mortgage backed securities to finance
new mortgage originations. This led to a sharper increase in mortgage supply
and house prices in markets with higher shares of lenders connected to the
private secondary market -- that is, those lenders that relied more on non-core
deposits (funding outside deposits from retail customers) prior to the increase
in Treasury rates.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm;">
<span style="mso-bookmark: _Hlk6987514;"><span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">In Figure
4, we show that, in addition to higher prices (panel (a)), counties exposed to
a higher share of non-deposit lenders also experienced an immediate increase in
the use of non-traditional mortgage products following the 2003 increase (panel
(b)). Notably, while the growth in non-traditional mortgage products is
instantaneous in mid-2003, house prices appreciate most sharply in the top
three quartiles of the non-core deposit distribution of counties, but only
after 6--12 months. In addition, across each quartile, growth in alternative
mortgage products increased monotonically with the share of non-deposit
lenders. This pattern suggests that an important mechanism during the 2000s was
an external shock to lenders' cost of capital that drove them toward the
secondary market, where non-traditional products flourished.<o:p></o:p></span></span><br />
<span style="mso-bookmark: _Hlk6987514;"><span lang="EN-US" style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><br /></span></span>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8OCv9j0aA7tMPBsMaDefz3D66gj6Tmr46iv9zGjiU5d_2cnPyH10UvZydPhbYogr7nk6b1bIC12xjvVJPy5j8zuI_fnmdAeEupUgBno-mVcf9kSzCNfF2GPwFZ4q24xMGAVONfJ3Jc3A/s1600/NCLquantile_time_a.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1164" data-original-width="1600" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8OCv9j0aA7tMPBsMaDefz3D66gj6Tmr46iv9zGjiU5d_2cnPyH10UvZydPhbYogr7nk6b1bIC12xjvVJPy5j8zuI_fnmdAeEupUgBno-mVcf9kSzCNfF2GPwFZ4q24xMGAVONfJ3Jc3A/s400/NCLquantile_time_a.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Figure 4a - Appreciation and Alternative Finance by Non-Core Lending Quartile, House Price Appreciation</td></tr>
</tbody></table>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYneCsiyPvd1RQnoifewDWPFvHfrFV9pKbKUJvmoCO8bPeg4L3Xs3lv8EVFTQJYyNxX0Cg-euQxoMALjb4bbbR_vq_3pbdiwtUwWtgD7z835ifdfitjJrmcopD-Rq8REErubgQCS8cPHE/s1600/NCLquantile_time_b.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1164" data-original-width="1600" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYneCsiyPvd1RQnoifewDWPFvHfrFV9pKbKUJvmoCO8bPeg4L3Xs3lv8EVFTQJYyNxX0Cg-euQxoMALjb4bbbR_vq_3pbdiwtUwWtgD7z835ifdfitjJrmcopD-Rq8REErubgQCS8cPHE/s400/NCLquantile_time_b.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Figure 4b - Appreciation and Alternative Finance by Non-Core Lending Quartile, Use of non-traditional mortgage products</td></tr>
</tbody></table>
<br />
However, we uncover a stark difference in the systematic relationship across markets with a house price boom that started before 2000. In these markets, non-traditional mortgage products emerge as unlikely contributors to county-specific starts in booms. In addition, we find little evidence of credit supply growth in the years immediately before or after the start of these booms. We also find evidence that incomes in these markets grew faster than the national trend in the years before a local boom. These results suggest that the impetus for the housing booms of the late 1990s were driven more by economic fundamentals and that borrowers turned to these products to maintain affordability.</div>
<div>
<br /></div>
<div>
In the wake of the crisis, regulators have placed significant limitations on a number of non-traditional mortgage features by excluding them from the definition of a “Qualified Mortgage” for regulatory purposes. As laid out by the Consumer Financial Protection Bureau in their <a href="http://files.consumerfinance.gov/f/201301_cfpb_ability-to-repay-rule_what-it-means-for-consumers.pdf" target="_blank">January 2013 report</a>, lenders will no longer be able to underwrite a qualified mortgage loan based on a “teaser” rate in determining the ability to pay. Moreover, mortgages cannot contain interest-only, have lower payments than the interest due, or extended term features if lenders want to meet the legal presumption of complying with the qualified mortgage regulation. </div>
<div>
<br /></div>
<div>
As we have shown, whether restricting these contract features will affect the formation and magnitude of housing price cycles in the future depends crucially on the context of the use of these features. Although these rules have only recently come into effect, the consequences of limiting these products is also likely to reduce credit access for some households, while guiding others into more standard contracts.</div>
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<div>
<div>
Additional info:</div>
<div>
<br /></div>
<div>
This article is based on the CEP Discussion Paper, ‘<a href="http://cep.lse.ac.uk/_new/publications/abstract.asp?index=6196" target="_blank">Affordability, Financial Innovation and the Start of the Housing Boom</a>’</div>
<div>
<br /></div>
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<h3>
About the author</h3>
</div>
<div>
<span style="white-space: pre;"> </span></div>
<div>
<b>Lindsay Relihan</b> – LSE Geography and Environment</div>
<div>
<br /></div>
<div>
<b>Lindsay Relihan</b> is an Assistant Professor of Real Estate Economics and Finance at the London School of Economics. She is an applied microeconomist with interests in urban economics, household finance, housing, and real estate. Her research agenda is focused on understanding how the spatial relationships between firms and consumers shape outcomes in consumer credit markets.<br />
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Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-59659756723205049752019-04-02T19:52:00.000+01:002019-04-02T19:52:04.798+01:00Valuing the environmental benefits of canals using house pricesBritain has an extensive canal and navigable river network, which played a vital role in transporting goods from the Industrial Revolution through the 18th, 19th and early part of the 20th Century. Their use for transporting freight had all but disappeared by the mid-20th Century and many had fallen into disrepair or been abandoned. Since then, the canal and waterway network has been restored and developed into a potentially valuable environmental and recreational amenity, providing the venue for extensive range of tourism and leisure activities and a habitat for wildlife. Canals also provide transport corridors for walkers and cyclists along the towpaths formerly used by horses for drawing boats. Features of the canals are an attraction to those interested in industrial heritage and canal-side properties can have distinctive character with an outlook over green space and water.<br />
<br />
Our recent <a href="http://cep.lse.ac.uk/pubs/download/dp1604.pdf" target="_blank">research</a> investigates the value of this resource to local residents in England and Wales, using house prices. Analysis of house prices is a well-established method within urban and environmental economics for establishing the value of amenities – such as good schools, transport, low crime or low pollution. This value is expressed as the monetary value of other types of consumption that people have to sacrifice in order to pay more for housing close to a desirable amenity (or away from an undesirable one). Part of our analysis looks prices close to canals across the whole of England and Wales, and part looks specifically at the change in prices induced by the restoration of the Droitwich Canals in the West Midlands after 2007.<br />
<br />
We find that there is a quite a large house price premium for living close to a canal, but this is very localised (see Figure). On average, a buyer can expect to pay around 3-4% more for a property within 100m of a canal relative to prices elsewhere (in 2016 prices), but this premium falls to zero beyond 100m. The implication is that the price effect is driven predominantly by canal-side properties and others with a direct outlook on the canals or immediate access. There is no premium for living near a canal other than right up close to it. The premium is higher in dense urban areas, as we would expect if people are willing to pay more in housing markets where green space is scarce. We also find evidence that canal-side locations have been attractive for developers, with a much higher proportion of new-build sales within 100m of canals relative to elsewhere - a 5.9 percentage point increase on an 7.8% baseline.<br />
<br />
<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtj-0LA-t-Dz3WqCvhEMN9i1j-PkUD03L1aMJBzhlBRtfzIu_D4yWmL4j9QWnAD6X_G6F3erz1WV3b3BQCHmux34PKWszZD76RcIrfSqKIgS7OMToAu42Ci0gtStVwI1v4y35Oisgf7Mw/s1600/graph_xsect_house_loc_emp.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="514" data-original-width="706" height="464" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtj-0LA-t-Dz3WqCvhEMN9i1j-PkUD03L1aMJBzhlBRtfzIu_D4yWmL4j9QWnAD6X_G6F3erz1WV3b3BQCHmux34PKWszZD76RcIrfSqKIgS7OMToAu42Ci0gtStVwI1v4y35Oisgf7Mw/s640/graph_xsect_house_loc_emp.png" width="640" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Price premium estimates and 95% confidence intervals for properties close to canals and waterways, 2002-2016 data. Distance scale in 100m. Vertical scale is prices in log points relative to properties between 1000m and 1500m from canals and waterways (0.01 = 1%).<br /><br /></td></tr>
</tbody></table>
Interestingly, the premium fell suddenly at the time of the last recession, from over 8% in 2007 to 4.4% in 2008. This step change suggests there was a structural shift in the demand for this environmental amenity at the time of the recession and the premium has not recovered since (up to the end of our data in 2016). A possible explanation is that demand shifted away from luxury aspects of property, including canal-side locations, as incomes fell and uncertainty about the housing market increased. <br />
<br />
Some back-of-the-envelope calculations indicate that the environmental benefits provide an uplift to land values within 100metres of canals in England and Wales that amounts to around around £0.8-£0.9 billion in 2016.<br />
<br />
<h3>
How we did the analysis</h3>
<div>
<div>
Although the idea of using house prices to value amenities is conceptually simple, there are challenges. The basic method is to use statistical techniques to estimate the average price difference between houses with a high level of an amenity (or dis-amenity) and similar houses with a lower level. Clearly, a key requirement is data on some variable that represents this exposure, in our setting, the indicators of distance from a property to its nearest canal. There are, however, potentially many ‘confounding factors’ which vary with distance to a canal and also affect the price directly – the physical characteristics of the housing, other amenities like distance to employment or distance to transport. Estimation methods must take account of these confounding factors so we are comparing houses on a like-for-like basis. Failure to do so might lead us to attribute differences in prices to proximity to canals, when in reality the price differences are caused by something else. For example, if canals in urban areas are predominantly in old industrial areas, and these industrial areas have older smaller houses and industrial buildings that are less attractive to residents, it might appear that proximity to canals reduces prices when in fact it is the average size of the houses or the industrial character of the environment which reduce prices. </div>
<div>
<br /></div>
<div>
To avoid this type of bias, we adopt two strategies in our study. First, we use standard multiple regression techniques to estimate the association between canal proximity and housing prices, while adjusting for a rich set of structural housing characteristics and local area attributes on which we can obtain data (‘control variables). We control for a wide range of land use indicators, distance to geographical features, employment and demographic variables, and in our preferred versions of these specifications, we further control for ‘fixed effects’ at a small geographical scale – either Middle Layer Super Output Areas (MSOAS) or Lower Layer Super Output Areas (LSOAs) – and for differing price trends at Local Authority District level. This means we estimate the price effects from variation in the distance to canals, and associated variation in house prices, that occurs within these small geographical areas. Confounding factors that vary at a higher geographical level between LSOAs/MSOAs – such as access to labour markets – are eliminated.</div>
<div>
<br /></div>
<div>
Our second strategy focusses on a specific canal regeneration project, which restored an abandoned canal – the Droitwich Canal in the West Midlands of England. The Droitwich Canals were closed in 1939 and in the early 2000s were mostly overgrown, drained of water, non-navigable or completely destroyed. They underwent a major restoration from 2007 onwards and were re-opened in 2011. The restoration reopened them for boat navigation and recreation, improved the general environment and provided a habitat for aquatic life. In this case, we compare the price changes occurring in a ‘treatment group’ of properties close to the canal when the canal is restored, with price changes occurring at the same time in appropriate ‘control groups’. The assumption behind this method is that prices would have evolved in the treatment group close to the Droitwich canals in much the same way as in the control group, if the Droitwich canals had not been restored. As control groups, we use places further away from the Droitwich canal, and places close to an existing neighbouring canal – the Worcester and Birmingham canal – that has remained in continuous use, and where we would not expect to say any environmental amenity-related price changes at this time. These comparisons allow us to estimate the value of the restoration and the enhanced recreational and environmental amenities it provides, in so far as this value shows up in different price changes in the treatment and control groups. This type of ‘difference-in-difference’ estimator is widely used for estimating the impact of policies on economic outcomes in the policy evaluation literature. Both methods give similar findings, with a sharp increase in prices close to canals, with larger but less precisely measure effects from the analysis of the Droitwich canals restoration.</div>
</div>
<div>
<br /></div>
<div>
<b>Disclosure: </b>the research was funded by the Canal and River Trust, but carried out independently by researchers at the Centre for Economic Performance and Department of Geography and Environment.</div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-15753272077735812572018-12-11T13:24:00.000+00:002018-12-11T13:24:14.183+00:00Do foreign migrants ‘grease the wheels’ of the labour market?[by Michael Amior]<br />
<br />
Recent political developments in the US and Europe have led to renewed interest in the large and persistent regional disparities which plague our societies. These disparities have been partly driven by a secular decline in manufacturing employment, whose impact has been heavily concentrated geographically. In principle, these disparities should be eliminated by regional mobility. But at least in the US, fewer people are making long-distance moves than in the past.<br />
<br />
In the face of these challenges, it has famously been argued that foreign migration can "grease the wheels" of the labour market. Given that new immigrants have already incurred the (fixed) costs of moving, they are very responsive to regional differences in economic opportunity - and therefore accelerate local population adjustment. If foreign migrants do indeed settle quickly in those regions where they are most needed, forcibly dispersing them within receiving countries (as several European countries do with refugees) may hurt natives as well as the migrants themselves.<br />
<br />
In a <a href="http://cep.lse.ac.uk/pubs/download/dp1582.pdf">recent CEP discussion paper</a> I revisit this question using US census data spanning five decades (1960-2010) and 722 commuting zones. Remarkably, I find that new foreign migrants account for 30 to 60 percent of the average population response to local changes in labor demand. However, population is no more responsive in locations better supplied by new migrants: a bigger response from foreign workers is almost entirely offset by a reduced one from internal mobility. This is fundamentally a story of “crowding out”: I estimate that new foreign migrants to a commuting zone crowd out existing US residents one-for-one. This is entirely due to a reduction of internal moves in to the affected areas, rather than larger moves out.<br />
<br />
The magnitude of the crowding out effect is puzzling. If Americans take time to adjust geographically to local declines in manufacturing employment, why do they appear so responsive to the location decisions of new immigrants? One plausible explanation is under-coverage of unauthorized migrants in the US census. This would overstate the crowding out effect (and also imply an even larger foreign contribution to local adjustment).<br />
<br />
Even in the extreme case of complete crowd-out, a regionally flexible migrant workforce can save natives from having to incur potentially steep moving costs themselves. It is also worth stressing that the US population is generally considered to be relatively mobile. One might expect that foreign migration "greases the wheels" more effectively in parts of Europe where internal population adjustment is more sluggish.<br />
Prof Henry G. Overmanhttp://www.blogger.com/profile/15203876610491317062noreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-84887231463196497722018-11-19T12:04:00.001+00:002018-11-19T12:04:21.278+00:00The Economic Impacts of Constraining Second Home Investments[by Christian Hilber]<br />
<br />
Investment in second homes has been <a href="http://cep.lse.ac.uk/pubs/download/cp543.pdf">surging around the world</a>. This surge has triggered a serious political backlash in many countries, especially in tourist areas and superstar cities. The backlash has at least in part been driven by legitimate concerns, such as ever more unaffordable housing, destruction of areas of natural beauty or creation of ghost towns during large parts of the year.<br />
<br />
The crucial question is how politically to address these concerns. Some countries, such as the UK, and cities, such as Vancouver, have introduced substantive transaction taxes on the purchase of second homes.<br />
<br />
Another policy that has become increasingly popular are constraints or outright bans on the construction of new second homes. The latest example in the UK is the Cornish seaside town of St. Ives. Other local communities in Cornwall and across the rest of the country have signalled interest in including similar policies in their own Neighbourhood Plans.<br />
<br />
What are the economic impacts of such bans on local housing and labour markets? This is the question that my co-author, Olivier Schöni, and I explore in <a href="http://cep.lse.ac.uk/pubs/download/dp1556.pdf">a recent CEP study</a>.<br />
<br />
In our empirical analysis, we exploit a unique quasi-natural experiment, the Swiss Second Home Initiative (SHI), to test theoretical predictions and identify causal effects of a ban on the construction of new second homes.<br />
<br />
The SHI requested that construction of new second homes be banned in municipalities where such homes represent more than 20% of the total housing stock. The SHI was approved by the narrowest of margins – 50.6% of votes and 13.5 of 26 cantons – in March 2012. It came into force in January 2013. <br />
<br />
Voters in tourist municipalities with very high shares of second homes were heavily opposed, presumably due to fears about adverse effects on the local economy. This contrasts with voters in the larger Swiss cities who favoured the initiative.<br />
<br />
So what were the effects of banning the construction of new second homes in desirable Swiss tourist locations? The ban on the construction of new second homes lowered the price of primary homes, adversely affecting local homeowners, but increased the price of second homes, further raising the wealth of existing – typically already wealthy – second homeowners. We also find that the policy increased unemployment rates, thus harming the local labour force.<br />
<br />
All in all, our findings suggest that the local economy effect (affecting primary house prices negatively) dominated the amenity-preservation effect (affecting primary house prices positively), resulting in an overall fall of the price of primary homes. They also suggest that, at least in the Swiss context, constraining the construction of new second homes reinforces rather than reduces wealth inequality. <br />
<br />
Banning the construction of new second homes or imposing transaction taxes on second home purchases may be politically popular policies in the short run. But our research suggests that they may not do anything to cure the underlying causes of the problems.<br />
<br />
[If you’d like to learn more about second homes, and the theoretical and empirical work we’re doing to look at the impact of constraints on investment then take a look at <a href="http://cep.lse.ac.uk/pubs/download/cp543.pdf">our longer piece in the latest edition of Centre Piece</a>]<br />
<br />
Prof Henry G. Overmanhttp://www.blogger.com/profile/15203876610491317062noreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-57307074182684863782018-11-13T16:12:00.002+00:002018-11-13T16:13:16.819+00:00Measuring Urban Economic Density[By Dzhamilya Nigmatulina]<br />
<br />
What makes cities productive? For a long time, researchers have known that city size matters a lot – people who live in larger cities tend to earn more and be more productive. People (and firms) benefit from proximity to each other and these benefits are manifested in cheaper trade, improved hiring and learning, and a wider choice of inputs and products.<br />
<br />
But does city size always generate proximity gains? A city that occupies a large area may also have very low density and low proximity, compared to a more compact city with the same population. In the same way, even a city’s high average density may not mean high proximity. Can we test if the shape of city density has economic implications? If so, how can we capture the meaningful dimensions of the city density? <br />
<br />
In our recent <a href="http://cep.lse.ac.uk/pubs/download/dp1569.pdf">CEP discussion paper</a> we try to answer these questions using data from cities of sub-Saharan Africa. <br />
<br />
<b>A real world example</b><br />
<br />
Cities with poor planning and land institutions may face issues of low proximity. In 1994 the urban scholar Lusugga Kironde living in Dar-es-Salaam noted about his city in his thesis:<br />
<br />
<i>"[…] Dar-es-Salaam is not systematically structured either in form of functional zones, or of income levels, or of types of developments. It does not reflect a structure responding to either a city well ordered by government, or, to the niceties of the market theory. It is this kind of unpatterned, irregular, and hotch potchy development, inconsistent with good land use planning or with the economic theories of land use structure, which engendered interest leading to this study."</i><br />
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Figure 1. Dar-es-Salaam, according to 1992 aerial photograph </div>
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<tr align="left"><td class="tr-caption">Source: Kithakye 2009</td><td class="tr-caption"></td><td class="tr-caption"></td><td class="tr-caption"></td><td class="tr-caption"><span style="font-family: "calibri" , sans-serif; font-size: 11.0pt; line-height: 107%;"></span><!--[if gte mso 9]><xml> <o:OfficeDocumentSettings> <o:AllowPNG/> </o:OfficeDocumentSettings> </xml><![endif]--><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w:TrackMoves/> <w:TrackFormatting/> <w:DoNotShowPropertyChanges/> <w:PunctuationKerning/> <w:ValidateAgainstSchemas/> <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false</w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText> <w:DoNotPromoteQF/> <w:LidThemeOther>EN-GB</w:LidThemeOther> <w:LidThemeAsian>X-NONE</w:LidThemeAsian> <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript> <w:Compatibility> <w:BreakWrappedTables/> <w:SnapToGridInCell/> <w:WrapTextWithPunct/> <w:UseAsianBreakRules/> <w:DontGrowAutofit/> <w:SplitPgBreakAndParaMark/> <w:EnableOpenTypeKerning/> <w:DontFlipMirrorIndents/> <w:OverrideTableStyleHps/> </w:Compatibility> <m:mathPr> <m:mathFont m:val="Cambria Math"/> <m:brkBin m:val="before"/> <m:brkBinSub m:val="--"/> <m:smallFrac m:val="off"/> <m:dispDef/> <m:lMargin m:val="0"/> <m:rMargin m:val="0"/> <m:defJc m:val="centerGroup"/> <m:wrapIndent m:val="1440"/> <m:intLim m:val="subSup"/> <m:naryLim m:val="undOvr"/> </m:mathPr></w:WordDocument> </xml><![endif]--><!--[if gte mso 9]><xml> <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="false"
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Name="List Bullet 5"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Number 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Number 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Number 4"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Number 5"/> <w:LsdException Locked="false" Priority="10" QFormat="true" Name="Title"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Closing"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Signature"/> <w:LsdException Locked="false" Priority="1" SemiHidden="true"
UnhideWhenUsed="true" Name="Default Paragraph Font"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text Indent"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Continue"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Continue 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Continue 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Continue 4"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Continue 5"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Message Header"/> <w:LsdException Locked="false" Priority="11" QFormat="true" Name="Subtitle"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Salutation"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Date"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text First Indent"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text First Indent 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Note Heading"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text Indent 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text Indent 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Block Text"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Hyperlink"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="FollowedHyperlink"/> <w:LsdException Locked="false" Priority="22" QFormat="true" Name="Strong"/> <w:LsdException Locked="false" Priority="20" QFormat="true" Name="Emphasis"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Document Map"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Plain Text"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="E-mail Signature"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Top of Form"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Bottom of Form"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Normal (Web)"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Acronym"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Address"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Cite"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Code"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Definition"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Keyboard"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Preformatted"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Sample"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Typewriter"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Variable"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Normal Table"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="annotation subject"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="No List"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Outline List 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Outline List 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Outline List 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Simple 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Simple 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Simple 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Classic 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Classic 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Classic 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Classic 4"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Colorful 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Colorful 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Colorful 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 4"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 5"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 4"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 5"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 6"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 7"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 8"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 4"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 5"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 6"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 7"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 8"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table 3D effects 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table 3D effects 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table 3D effects 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Contemporary"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Elegant"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Professional"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Subtle 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Subtle 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Web 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Web 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Web 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Balloon Text"/> <w:LsdException Locked="false" Priority="39" Name="Table Grid"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Theme"/> <w:LsdException Locked="false" SemiHidden="true" Name="Placeholder Text"/> <w:LsdException Locked="false" Priority="1" QFormat="true" Name="No Spacing"/> <w:LsdException Locked="false" Priority="60" Name="Light Shading"/> <w:LsdException Locked="false" Priority="61" Name="Light List"/> <w:LsdException Locked="false" Priority="62" Name="Light Grid"/> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1"/> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2"/> <w:LsdException Locked="false" Priority="65" Name="Medium List 1"/> <w:LsdException Locked="false" Priority="66" Name="Medium List 2"/> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1"/> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2"/> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3"/> <w:LsdException Locked="false" Priority="70" Name="Dark List"/> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading"/> <w:LsdException Locked="false" Priority="72" Name="Colorful List"/> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid"/> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 1"/> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 1"/> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 1"/> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 1"/> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 1"/> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 1"/> <w:LsdException Locked="false" SemiHidden="true" Name="Revision"/> <w:LsdException Locked="false" Priority="34" QFormat="true"
Name="List Paragraph"/> <w:LsdException Locked="false" Priority="29" QFormat="true" Name="Quote"/> <w:LsdException Locked="false" Priority="30" QFormat="true"
Name="Intense Quote"/> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 1"/> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 1"/> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 1"/> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 1"/> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 1"/> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 1"/> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 1"/> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 1"/> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 2"/> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 2"/> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 2"/> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 2"/> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 2"/> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 2"/> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 2"/> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 2"/> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 2"/> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 2"/> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 2"/> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 2"/> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 2"/> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 2"/> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 3"/> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 3"/> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 3"/> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 3"/> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 3"/> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 3"/> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 3"/> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 3"/> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 3"/> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 3"/> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 3"/> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 3"/> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 3"/> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 3"/> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 4"/> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 4"/> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 4"/> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 4"/> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 4"/> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 4"/> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 4"/> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 4"/> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 4"/> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 4"/> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 4"/> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 4"/> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 4"/> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 4"/> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 5"/> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 5"/> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 5"/> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 5"/> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 5"/> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 5"/> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 5"/> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 5"/> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 5"/> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 5"/> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 5"/> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 5"/> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 5"/> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 5"/> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 6"/> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 6"/> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 6"/> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 6"/> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 6"/> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 6"/> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 6"/> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 6"/> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 6"/> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 6"/> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 6"/> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 6"/> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 6"/> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 6"/> <w:LsdException Locked="false" Priority="19" QFormat="true"
Name="Subtle Emphasis"/> <w:LsdException Locked="false" Priority="21" QFormat="true"
Name="Intense Emphasis"/> <w:LsdException Locked="false" Priority="31" QFormat="true"
Name="Subtle Reference"/> <w:LsdException Locked="false" Priority="32" QFormat="true"
Name="Intense Reference"/> <w:LsdException Locked="false" Priority="33" QFormat="true" Name="Book Title"/> <w:LsdException Locked="false" Priority="37" SemiHidden="true"
UnhideWhenUsed="true" Name="Bibliography"/> <w:LsdException Locked="false" Priority="39" SemiHidden="true"
UnhideWhenUsed="true" QFormat="true" Name="TOC Heading"/> <w:LsdException Locked="false" Priority="41" Name="Plain Table 1"/> <w:LsdException Locked="false" Priority="42" Name="Plain Table 2"/> <w:LsdException Locked="false" Priority="43" Name="Plain Table 3"/> <w:LsdException Locked="false" Priority="44" Name="Plain Table 4"/> <w:LsdException Locked="false" Priority="45" Name="Plain Table 5"/> <w:LsdException Locked="false" Priority="40" Name="Grid Table Light"/> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark"/> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful"/> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful"/> <w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 1"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 1"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 1"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 1"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 1"/> <w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 1"/> <w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 1"/> <w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 2"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 2"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 2"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 2"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 2"/> <w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 2"/> <w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 2"/> <w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 3"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 3"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 3"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 3"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 3"/> <w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 3"/> <w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 3"/> <w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 4"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 4"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 4"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 4"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 4"/> <w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 4"/> <w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 4"/> <w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 5"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 5"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 5"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 5"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 5"/> <w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 5"/> <w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 5"/> <w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 6"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 6"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 6"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 6"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 6"/> <w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 6"/> <w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 6"/> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark"/> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful"/> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful"/> <w:LsdException Locked="false" Priority="46"
Name="List Table 1 Light Accent 1"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 1"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 1"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 1"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 1"/> <w:LsdException Locked="false" Priority="51"
Name="List Table 6 Colorful Accent 1"/> <w:LsdException Locked="false" Priority="52"
Name="List Table 7 Colorful Accent 1"/> <w:LsdException Locked="false" Priority="46"
Name="List Table 1 Light Accent 2"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 2"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 2"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 2"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 2"/> <w:LsdException Locked="false" Priority="51"
Name="List Table 6 Colorful Accent 2"/> <w:LsdException Locked="false" Priority="52"
Name="List Table 7 Colorful Accent 2"/> <w:LsdException Locked="false" Priority="46"
Name="List Table 1 Light Accent 3"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 3"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 3"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 3"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 3"/> <w:LsdException Locked="false" Priority="51"
Name="List Table 6 Colorful Accent 3"/> <w:LsdException Locked="false" Priority="52"
Name="List Table 7 Colorful Accent 3"/> <w:LsdException Locked="false" Priority="46"
Name="List Table 1 Light Accent 4"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 4"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 4"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 4"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 4"/> <w:LsdException Locked="false" Priority="51"
Name="List Table 6 Colorful Accent 4"/> <w:LsdException Locked="false" Priority="52"
Name="List Table 7 Colorful Accent 4"/> <w:LsdException Locked="false" Priority="46"
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<i> </i> <br />
<br />
Twenty years later and not much changed in Dar-es-Salaam. Even though the residential population distribution on Figure 3 tells us nothing about the location of firms and workers, it is evident that people reside far from each other: the highest density settlements are informal, and large residential areas are far away from the coastal centre of the city. The story of Dar-es-Salaam is not a unique one in Sub-Saharan Africa. Colonial history, imperfect transport systems, and lack of formal land has impelled cities to grow haphazardly, leaving many crammed in informal sector areas with poor access to the economic and social opportunities of urban life.<br />
<br />
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjX45rA1ciPMNpsmyawBlfLpbPsmFDRkSJTooKGtfFUyPJELP1jXyYP2BFBFYU7DAguKsczRJ900GURLpkaHkyKOwFt1IB4tRXoubmGngZXkM8SnkGesfbnMuAedr0kzJqWy0TtVA-oXGNn/s1600/Urban_Density_Blog_Figure_2.jpg.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="845" data-original-width="1600" height="210" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjX45rA1ciPMNpsmyawBlfLpbPsmFDRkSJTooKGtfFUyPJELP1jXyYP2BFBFYU7DAguKsczRJ900GURLpkaHkyKOwFt1IB4tRXoubmGngZXkM8SnkGesfbnMuAedr0kzJqWy0TtVA-oXGNn/s400/Urban_Density_Blog_Figure_2.jpg.png" width="400" /></a></td></tr>
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<span lang="EN-US" style="color: #353535; font-family: "applesystemuifont"; mso-ansi-language: EN-US; mso-bidi-font-family: AppleSystemUIFont;">Figure 2. Dar-es-Salaam population distribution according to the 2012 population census.</span></div>
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UnhideWhenUsed="true" Name="Bibliography"/> <w:LsdException Locked="false" Priority="39" SemiHidden="true"
UnhideWhenUsed="true" QFormat="true" Name="TOC Heading"/> <w:LsdException Locked="false" Priority="41" Name="Plain Table 1"/> <w:LsdException Locked="false" Priority="42" Name="Plain Table 2"/> <w:LsdException Locked="false" Priority="43" Name="Plain Table 3"/> <w:LsdException Locked="false" Priority="44" Name="Plain Table 4"/> <w:LsdException Locked="false" Priority="45" Name="Plain Table 5"/> <w:LsdException Locked="false" Priority="40" Name="Grid Table Light"/> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark"/> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful"/> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful"/> <w:LsdException Locked="false" Priority="46"
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Name="List Table 7 Colorful Accent 2"/> <w:LsdException Locked="false" Priority="46"
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Name="List Table 6 Colorful Accent 3"/> <w:LsdException Locked="false" Priority="52"
Name="List Table 7 Colorful Accent 3"/> <w:LsdException Locked="false" Priority="46"
Name="List Table 1 Light Accent 4"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 4"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 4"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 4"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 4"/> <w:LsdException Locked="false" Priority="51"
Name="List Table 6 Colorful Accent 4"/> <w:LsdException Locked="false" Priority="52"
Name="List Table 7 Colorful Accent 4"/> <w:LsdException Locked="false" Priority="46"
Name="List Table 1 Light Accent 5"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 5"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 5"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 5"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 5"/> <w:LsdException Locked="false" Priority="51"
Name="List Table 6 Colorful Accent 5"/> <w:LsdException Locked="false" Priority="52"
Name="List Table 7 Colorful Accent 5"/> <w:LsdException Locked="false" Priority="46"
Name="List Table 1 Light Accent 6"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 6"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 6"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 6"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 6"/> <w:LsdException Locked="false" Priority="51"
Name="List Table 6 Colorful Accent 6"/> <w:LsdException Locked="false" Priority="52"
Name="List Table 7 Colorful Accent 6"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Mention"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Smart Hyperlink"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Hashtag"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Unresolved Mention"/> </w:LatentStyles> </xml><![endif]--><!--[if gte mso 10]> <style>
/* Style Definitions */
table.MsoNormalTable
{mso-style-name:"Table Normal";
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-parent:"";
mso-padding-alt:0cm 5.4pt 0cm 5.4pt;
mso-para-margin-top:0cm;
mso-para-margin-right:0cm;
mso-para-margin-bottom:8.0pt;
mso-para-margin-left:0cm;
line-height:107%;
mso-pagination:widow-orphan;
font-size:11.0pt;
font-family:"Calibri",sans-serif;
mso-ascii-font-family:Calibri;
mso-ascii-theme-font:minor-latin;
mso-hansi-font-family:Calibri;
mso-hansi-theme-font:minor-latin;
mso-bidi-font-family:"Times New Roman";
mso-bidi-theme-font:minor-bidi;
mso-fareast-language:EN-US;}
</style> <![endif]--><span style="font-size: xx-small;"><span style="font-family: "calibri" , sans-serif; line-height: 107%;">Source: Tanzania National Bureau of Statistics, Population census 2012 and author’s calculations</span></span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; text-autospace: none;">
<br /></div>
<!--[if gte mso 9]><xml> <o:OfficeDocumentSettings> <o:AllowPNG/> </o:OfficeDocumentSettings> </xml><![endif]--><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w:TrackMoves/> <w:TrackFormatting/> <w:DoNotShowPropertyChanges/> <w:PunctuationKerning/> <w:ValidateAgainstSchemas/> <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false</w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText> <w:DoNotPromoteQF/> <w:LidThemeOther>EN-GB</w:LidThemeOther> <w:LidThemeAsian>X-NONE</w:LidThemeAsian> <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript> <w:Compatibility> <w:BreakWrappedTables/> <w:SnapToGridInCell/> <w:WrapTextWithPunct/> <w:UseAsianBreakRules/> <w:DontGrowAutofit/> <w:SplitPgBreakAndParaMark/> <w:EnableOpenTypeKerning/> <w:DontFlipMirrorIndents/> <w:OverrideTableStyleHps/> </w:Compatibility> <m:mathPr> <m:mathFont m:val="Cambria Math"/> <m:brkBin m:val="before"/> <m:brkBinSub m:val="--"/> <m:smallFrac m:val="off"/> <m:dispDef/> <m:lMargin m:val="0"/> <m:rMargin m:val="0"/> <m:defJc m:val="centerGroup"/> <m:wrapIndent m:val="1440"/> <m:intLim m:val="subSup"/> <m:naryLim m:val="undOvr"/> </m:mathPr></w:WordDocument> </xml><![endif]--><!--[if gte mso 9]><xml> <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="false"
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Name="List Continue 4"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="List Continue 5"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Message Header"/> <w:LsdException Locked="false" Priority="11" QFormat="true" Name="Subtitle"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Salutation"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Date"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text First Indent"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text First Indent 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Note Heading"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text Indent 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Body Text Indent 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Block Text"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Hyperlink"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="FollowedHyperlink"/> <w:LsdException Locked="false" Priority="22" QFormat="true" Name="Strong"/> <w:LsdException Locked="false" Priority="20" QFormat="true" Name="Emphasis"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Document Map"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Plain Text"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="E-mail Signature"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Top of Form"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Bottom of Form"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Normal (Web)"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Acronym"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Address"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Cite"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Code"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Definition"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Keyboard"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Preformatted"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Sample"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Typewriter"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="HTML Variable"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Normal Table"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="annotation subject"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="No List"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Outline List 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Outline List 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Outline List 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Simple 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Simple 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Simple 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Classic 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Classic 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Classic 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Classic 4"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Colorful 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Colorful 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Colorful 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 4"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Columns 5"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 4"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 5"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 6"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 7"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Grid 8"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 4"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 5"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 6"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 7"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table List 8"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table 3D effects 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table 3D effects 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table 3D effects 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Contemporary"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Elegant"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Professional"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Subtle 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Subtle 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Web 1"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Web 2"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Web 3"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Balloon Text"/> <w:LsdException Locked="false" Priority="39" Name="Table Grid"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Table Theme"/> <w:LsdException Locked="false" SemiHidden="true" Name="Placeholder Text"/> <w:LsdException Locked="false" Priority="1" QFormat="true" Name="No Spacing"/> <w:LsdException Locked="false" Priority="60" Name="Light Shading"/> <w:LsdException Locked="false" Priority="61" Name="Light List"/> <w:LsdException Locked="false" Priority="62" Name="Light Grid"/> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1"/> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2"/> <w:LsdException Locked="false" Priority="65" Name="Medium List 1"/> <w:LsdException Locked="false" Priority="66" Name="Medium List 2"/> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1"/> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2"/> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3"/> <w:LsdException Locked="false" Priority="70" Name="Dark List"/> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading"/> <w:LsdException Locked="false" Priority="72" Name="Colorful List"/> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid"/> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 1"/> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 1"/> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 1"/> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 1"/> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 1"/> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 1"/> <w:LsdException Locked="false" SemiHidden="true" Name="Revision"/> <w:LsdException Locked="false" Priority="34" QFormat="true"
Name="List Paragraph"/> <w:LsdException Locked="false" Priority="29" QFormat="true" Name="Quote"/> <w:LsdException Locked="false" Priority="30" QFormat="true"
Name="Intense Quote"/> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 1"/> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 1"/> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 1"/> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 1"/> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 1"/> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 1"/> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 1"/> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 1"/> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 2"/> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 2"/> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 2"/> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 2"/> <w:LsdException Locked="false" Priority="64" Name="Medium 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Priority="61" Name="Light List Accent 5"/> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 5"/> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 5"/> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 5"/> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 5"/> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 5"/> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 5"/> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 5"/> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 5"/> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 5"/> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 5"/> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 5"/> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 5"/> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 6"/> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 6"/> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 6"/> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 6"/> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 6"/> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 6"/> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 6"/> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 6"/> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 6"/> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 6"/> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 6"/> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 6"/> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 6"/> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 6"/> <w:LsdException Locked="false" Priority="19" QFormat="true"
Name="Subtle Emphasis"/> <w:LsdException Locked="false" Priority="21" QFormat="true"
Name="Intense Emphasis"/> <w:LsdException Locked="false" Priority="31" QFormat="true"
Name="Subtle Reference"/> <w:LsdException Locked="false" Priority="32" QFormat="true"
Name="Intense Reference"/> <w:LsdException Locked="false" Priority="33" QFormat="true" Name="Book Title"/> <w:LsdException Locked="false" Priority="37" SemiHidden="true"
UnhideWhenUsed="true" Name="Bibliography"/> <w:LsdException Locked="false" Priority="39" SemiHidden="true"
UnhideWhenUsed="true" QFormat="true" Name="TOC Heading"/> <w:LsdException Locked="false" Priority="41" Name="Plain Table 1"/> <w:LsdException Locked="false" Priority="42" Name="Plain Table 2"/> <w:LsdException Locked="false" Priority="43" Name="Plain Table 3"/> <w:LsdException Locked="false" Priority="44" Name="Plain Table 4"/> <w:LsdException Locked="false" Priority="45" Name="Plain Table 5"/> <w:LsdException Locked="false" Priority="40" Name="Grid Table Light"/> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark"/> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful"/> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful"/> <w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 1"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 1"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 1"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 1"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 1"/> <w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 1"/> <w:LsdException Locked="false" Priority="52"
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Name="Grid Table 1 Light Accent 2"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 2"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 2"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 2"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 2"/> <w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 2"/> <w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 2"/> <w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 3"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 3"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 3"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 3"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 3"/> <w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 3"/> <w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 3"/> <w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 4"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 4"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 4"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 4"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 4"/> <w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 4"/> <w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 4"/> <w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 5"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 5"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 5"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 5"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 5"/> <w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 5"/> <w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 5"/> <w:LsdException Locked="false" Priority="46"
Name="Grid Table 1 Light Accent 6"/> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 6"/> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 6"/> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 6"/> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 6"/> <w:LsdException Locked="false" Priority="51"
Name="Grid Table 6 Colorful Accent 6"/> <w:LsdException Locked="false" Priority="52"
Name="Grid Table 7 Colorful Accent 6"/> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark"/> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful"/> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful"/> <w:LsdException Locked="false" Priority="46"
Name="List Table 1 Light Accent 1"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 1"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 1"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 1"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 1"/> <w:LsdException Locked="false" Priority="51"
Name="List Table 6 Colorful Accent 1"/> <w:LsdException Locked="false" Priority="52"
Name="List Table 7 Colorful Accent 1"/> <w:LsdException Locked="false" Priority="46"
Name="List Table 1 Light Accent 2"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 2"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 2"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 2"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 2"/> <w:LsdException Locked="false" Priority="51"
Name="List Table 6 Colorful Accent 2"/> <w:LsdException Locked="false" Priority="52"
Name="List Table 7 Colorful Accent 2"/> <w:LsdException Locked="false" Priority="46"
Name="List Table 1 Light Accent 3"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 3"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 3"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 3"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 3"/> <w:LsdException Locked="false" Priority="51"
Name="List Table 6 Colorful Accent 3"/> <w:LsdException Locked="false" Priority="52"
Name="List Table 7 Colorful Accent 3"/> <w:LsdException Locked="false" Priority="46"
Name="List Table 1 Light Accent 4"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 4"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 4"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 4"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 4"/> <w:LsdException Locked="false" Priority="51"
Name="List Table 6 Colorful Accent 4"/> <w:LsdException Locked="false" Priority="52"
Name="List Table 7 Colorful Accent 4"/> <w:LsdException Locked="false" Priority="46"
Name="List Table 1 Light Accent 5"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 5"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 5"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 5"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 5"/> <w:LsdException Locked="false" Priority="51"
Name="List Table 6 Colorful Accent 5"/> <w:LsdException Locked="false" Priority="52"
Name="List Table 7 Colorful Accent 5"/> <w:LsdException Locked="false" Priority="46"
Name="List Table 1 Light Accent 6"/> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 6"/> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 6"/> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 6"/> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 6"/> <w:LsdException Locked="false" Priority="51"
Name="List Table 6 Colorful Accent 6"/> <w:LsdException Locked="false" Priority="52"
Name="List Table 7 Colorful Accent 6"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Mention"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Smart Hyperlink"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Hashtag"/> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true"
Name="Unresolved Mention"/> </w:LatentStyles> </xml><![endif]--><!--[if gte mso 10]> <style>
/* Style Definitions */
table.MsoNormalTable
{mso-style-name:"Table Normal";
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
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<b>Does shape matter?</b><br />
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In our study we use Landscan - a dataset the captures the distribution of ambient population, i.e. the average number of people in each square kilometre of the city over 24 hours. This measure captures not only residents, but also indirectly the location of firms. Understanding the actual proximity of people or workers within a city also requires a measure of the city extent, which defines a self-contained labor market. We choose population density to define city extents and use 1,500 people per km^2 as a simple cutoff.<br />
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Living Standard Measurement Study (LSMS) surveys from the World Bank give us income and wages for cities in six sub-Saharan Africa countries.<br />
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<b>African cities are surprisingly dense and clustered</b><br />
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Comparing 599 large cities in Africa to other continents reveals that the African cities are denser, and more clustered, than those in the developed world. This is surprising, since the example of Dar-es-Salaam is often seen as representative of a more general problem of weaker land institutions in Africa (which would lead to lower clustering). If we look at differences of the cities in sub-Saharan Africa and the cities in other developing countries, we find that sub-Saharan Africa, Asia and North Africa are similar in terms of density and all clustering measures. It is Latin America that is less clustered.<br />
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Looking across African cities, density correlates with individual and household wages in that city, but clustering does not help explain differences in wages. This is puzzling. Especially when we see that for detailed firm-level data in Kampala higher worker density does matter for firm value added.<br />
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<b>Conclusion</b><br />
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What explains the higher than expected clustering of African cities? One possible explanation is that our measure of “ambient” population captures the residential population more than the worker population. If higher density, or “cramming”, compensates for difficult commutes then the pattern of residential locations swamps the distribution of employment that matters in explaining productivity. <br />
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This could also explain why our clustering measures fail to explain wage premiums even though the Marshallian theories (and some additional findings for worker density in Kampala) highlight the benefits of proximity. Landscan only provides a proxy (e.g. built cover, building heights and other undisclosed data) measure for the things we care about. Comparing and contrasting novel spatial datasets, such as Landscan, with traditional survey and economic census data would help improve our understanding. <br />
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Adding transport costs can also paint a better picture on the true proximity between workers. See <a href="http://documents.worldbank.org/curated/en/811261533850020988/Mobility-and-congestion-in-urban-India">Akbar et al. (2017)</a> for steps in this direction. <br />
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These questions and data limitations provide lots of opportunities for future research. As better data become within reach, we will be able to calculate our clustering indices and better test our proximity theories.<br />
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<br />Prof Henry G. Overmanhttp://www.blogger.com/profile/15203876610491317062noreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-34853915155919045272018-10-30T11:57:00.001+00:002018-10-30T13:49:46.559+00:00The Making of Modern London<b>[By Stephan Heblich, Steve Redding and Daniel Sturm]</b><br />
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Modern metropolitan areas include vast concentrations of economic activity, with Greater London and New York City today accounting for around 8.4 and 8.5 million people, respectively. These intense population concentrations involve the transport of millions of people each day between their residence and workplace. Today, the London Underground alone handles around 3.5 million passenger journeys per day, and its trains travel around 76 million kilometres each year (about 200 times the distance between the earth and the moon). Yet relatively little is known about the role of these commuting flows in sustaining dense concentrations of economic activity. On the one hand, these commuting flows impose substantial real resource costs, both in terms of time spent commuting and the construction of large networks of complex transportation infrastructure. On the other hand, they are also central to the creation of predominantly commercial and residential areas, with their distinctive characteristics for production and consumption.<br />
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In our recent <a href="http://cep.lse.ac.uk/pubs/download/dp1573.pdf">CEP discussion paper</a> we use the mid-19th century transport revolution from the invention of steam railways, a newly created, spatially disaggregated dataset for Greater London from 1801-1921, and a quantitative urban model to provide new evidence on the contribution of the separation of workplace and residence to agglomeration. London during the 19th century is arguably the poster child for the large metropolitan areas observed around the world today. In 1801, London's built-up area housed around 1 million people and spanned only five miles East to West. In contrast, by 1901, Greater London contained over 6.5 million people, measured more than 17 miles across, and was on a dramatically larger scale than any previous urban area. By the beginning of the 20th century, London was the largest city in the world by some margin (with New York City and Greater Paris having populations of 3.4 million and 4 million, respectively, at this time), and London's population exceeded that of several European countries. Furthermore, London developed through a largely haphazard and organic process during this period, which suggests that both the size and structure of the city responded to decentralised market forces. Therefore, 19th century London provides a natural testing ground for assessing the empirical relevance of models of city size and structure.<br />
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The key idea behind our approach is that the slow travel times achievable by human or horse power implied that most people lived close to where they worked when these were the main modes of transportation. In contrast, the invention of steam railways dramatically reduced the time taken to travel a given distance, increasing average travel speeds from around 6 mph for horse-drawn vehicles and 3 mph for walking to around 21 mph, which permitted the first large-scale separation of workplace and residence. This separation enabled locations to specialise according to their comparative advantage in production and residence.<br />
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Our evidence strongly suggests that a class of quantitative urban models is remarkably successful when using these changes in transport costs to explain the large-scale changes in the organisation of economic activity observed in 19th century London. Our findings highlight the role of modern transport technologies in sustaining dense concentrations of economic activity.<br />
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This is a short version of <a href="https://voxeu.org/article/making-modern-metropolis-evidence-london">our recent VoxEU piece</a> (which provides more methodological detail).<br />
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You might also enjoy Steve Redding's <a href="https://voxeu.org/vox-talks/making-modern-london">VoxEU interview</a> on our research. <br />
<br />Prof Henry G. Overmanhttp://www.blogger.com/profile/15203876610491317062noreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-35138573212451330722018-10-15T18:26:00.000+01:002018-10-15T18:26:21.366+01:00How much will households pay to avoid council tax?[By <a href="http://cep.lse.ac.uk/_new/staff/person.asp?id=8498">Ted Pinchbeck</a> and <a href="https://www.urbaneconomics.nl/">Hans Koster</a>]<br />
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Are you paying attention? In many situations research suggests not. For example, when we buy things online, on average we respond more to the purchase price than to the shipping cost. As the total comprises the sum of both costs, this doesn’t make sense. A series of recent tests look at whether we take full account of the future when we buy things that are durable, like cars or fridges. Much of this evidence suggests that for these types of purchases we tend to undervalue the future, in some cases by quite large margins. That is when we buy a new car we focus too much on the up front price, and not enough on future savings that come from better fuel economy. This matters from a policy perspective because it means we end up with too many gas guzzlers.<br />
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In <a href="http://cep.lse.ac.uk/pubs/download/dp1571.pdf">a recent paper</a>, we apply these insights to the valuation of future Council taxes in home purchases. The basic idea behind our paper is to work out how much we pay upfront to reduce our Council Tax by one Pound every year (by looking at similar homes either side of Local Authority boundaries with different tax rates).<br />
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As with the work on cars, we test to see if people pay attention to the discounted costs resulting from future property taxes. The bottom line is that on average it looks like they do: our figures suggest that £30 or so will buy you an annual reduction in Council tax of £1 per year. If we can assume this saving is indefinite, your £30 investment yields a return of between 3 and 4%. This seems a reasonable return as it sits roughly comparable to average mortgage rates over the period.<br />
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Why do we care about this? Well for one it tells us that where we find some evidence that people are inattentive to the future in some places they appear to be pretty rational when it comes to home purchases (or at least in valuing the tax elements). Clearly one size does not fit all.<br />
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However, we also find that beyond 2008 that discount rates implied by taxes remain flat, and as such become detached from prevailing real terms market rates. Although we are not yet in a position to fully explain why this is (that’s research, folks!), it is clearly interesting because we’d expect changes in borrowing and lending rates to feed through to how people value the future. Our paper suggests that this is not always the case. <br />
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Prof Henry G. Overmanhttp://www.blogger.com/profile/15203876610491317062noreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-68576350098720712582018-10-01T13:06:00.000+01:002018-10-01T13:06:53.179+01:00Incubators, accelerators and local economic development <b>Posted by Max Nathan, Birmingham University and CEP </b><br />
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I’ve written a new <a href="http://cep.lse.ac.uk/pubs/download/dp1575.pdf" target="_blank">CEP Discussion Paper</a> on co-working, incubators, accelerators and what they mean for local economic development policy (co-authored with <a href="https://twitter.com/mmadaleno" target="_blank">Margarida Madaleno</a>, <a href="http://www.lse.ac.uk/researchAndExpertise/Experts/profile.aspx?KeyValue=h.g.overman%40lse.ac.uk" target="_blank">Henry Overman</a> and <a href="https://sites.google.com/site/sgwaights/home" target="_blank">Sevrin Waights</a>). It builds on <a href="http://www.whatworksgrowth.org/resources/business-advice-toolkit-incubators" target="_blank">two</a> <a href="http://www.whatworksgrowth.org/blog/business-advice-toolkit-accelerators" target="_blank">toolkits</a> for the What Works Centre for Local Economic Growth. <br /><br />Accelerators and incubators are business support programmes that provide co-working-based packages of support to young firms to help them grow. Widely used in the <a href="http://www.nesta.org.uk/publications/startup-factories" target="_blank">tech sector</a>, they are now increasingly applied in other industries - including <a href="https://jlab.co.uk/" target="_blank">retail</a>, fashion and <a href="https://bkaccelerator.com/" target="_blank">design</a> and <a href="https://foundry.unilever.com/" target="_blank">household goods</a> - even in the <a href="http://www.bankofengland.co.uk/Pages/fintech/default.aspx" target="_blank">Bank of England</a>.<br /><br />Why should we look at these interventions? In a nutshell, they’re now a very visible part of the UK urban landscape. As of April last year, there were 771 incubators, accelerators and co-working spaces in Britain. NESTA have done <a href="https://www.nesta.org.uk/blog/incubators-and-accelerators-an-updated-directory-for-the-uk/" target="_blank">some great work</a> mapping their spread (see image). <br /><br />
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<br />In particular, there’s been an explosion of co-working, incubator and accelerator provision in London: in 2014 there were at least 132 programmes, <a href="https://www.london.gov.uk/sites/default/files/supporting_places_of_work_-_iacs.pdf" target="_blank">50% of which had arrived since 2012</a>, and in 2017 the capital had 171, more than the next ten cities combined. Together with pop-ups, co-working and evolving high streets, these flexible spaces and practices are - arguably - starting to <a href="https://medium.com/@maxnathan/urban-incubators-innovation-inequality-a-new-research-agenda-24be2792049e" target="_blank">change the wider urban fabric</a>. <br /><br />It’s also important to look at these co-working models because of what they might achieve. In theory, incubators/accelerators can make entrepreneurs more effective, and help firms/founders to innovate. That <a href="https://en.wikipedia.org/wiki/Endogenous_growth_theory" target="_blank">feeds into long-term economic growth</a>. In cities, they could also deepen clusters. They may also help groups - like some BME or female founders - facing structural barriers in ‘regular’ economic space. <br /><br />Given that <a href="https://www.nesta.org.uk/blog/assessing-impact-incubators-and-accelerators/" target="_blank">over half of UK providers now have some public funding behind them</a>, it’s particularly important to understand whether these programmes actually work. For the more selective business models, like accelerators, providers might just be picking founders and firms who would do well anyway – what economists call a selection problem. <br /><br />* <br /><br />We define accelerators and incubators in Table 1, which is adapted from the Harvard Business Review. Put crudely, accelerators (like <a href="https://www.ycombinator.com/" target="_blank">YCombinator</a> or <a href="https://www.joinef.com/" target="_blank">Entrepreneur First</a>) offer short-term, intensive support to a competitively selected group of firms; while incubators (like <a href="https://www.techhub.com/" target="_blank">TechHub</a>) offer less-intensive, more ad-hoc support to firms on a rolling basis. Accelerators don't charge, and may take equity stakes; incubators typically charge rent. These are 'ideal-types'; in practice we see spaces (such as <a href="https://secondhome.io/" target="_blank">Second Home</a> or <a href="http://thetrampery.com/" target="_blank">The Trampery</a>) which combine features of both. <br />
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It’s also helpful to put these newer programmes in context: there’s a long history of co-working models (Figure 1). </div>
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<br />In the paper we set out four – linked - ways to think about what incubators and accelerators actually do. Urban economists would think of them as <b>cities in miniature</b>, offering matching, sharing and (especially) learning effects over and above what economic actors would encounter at urban or neighbourhood scale. In addition, economic geographers might focus on how programmes enable <b>different kinds of proximity</b>, and the pros and cons of that; management scholars would frame programmes as <b>de-risking the process of entrepreneurship</b>; and economic sociologists would think about <b>economic communities of practice</b>, where founders can develop an entrepreneurial identity. All of these analytical lenses are helpful, and all suggest important questions for evaluators. <br /><br />* <br /><br />So what does the evaluation evidence tell us? We found fourteen <a href="http://www.whatworksgrowth.org/resources/the-scientific-maryland-scale/" target="_blank">high quality</a> impact evaluations looking at incubators, accelerators or both. We also found eight further studies that look at researchers – often academics – in science parks, lab co-location and in ‘temporary co-location’ settings such as conferences. <br /><br />These provide good evidence that accelerators increase employment for firms who take part, compared to losing applicants (or similar non-participants). One of these also looks at firm sales, again finding a positive effect. The evidence for incubators is also positive, though less clear-cut. <br /><br />We find strong evidence that accelerators help cohort firms to raise external finance post-programme, typically angel or VC money. For incubators, we didn't - surprisingly - find any studies that tested this. <br /><br />Strikingly, both types of programme have a pretty mixed impact on firm survival: of the four accelerator studies that test this, for example, we find one positive, one mixed and two negative results. What's going on here? The most plausible explanation is that accelerators help participants to quickly gauge the quality of their ideas (e.g. via investor / peer feedback on demo days) and encourage those with weak propositions to quit early. That is, the programmes help kill bad ideas: one provider we spoke to told us they run 'startup funerals' to commemorate their passing, as founders move on to new things. <br /><br />It's rather harder to figure out just how accelerators and incubators achieve these effects - and thus, how to design programmes that reliably get to these outcomes. In part this is because fewer evaluations have explored these issues - so the following results need more caution. <br /><br />For example, we find no clear differences in outcomes when comparing public and privately-run accelerator programmes, although among the latter group, top programmes in the US (like YCombinator or <a href="https://www.techstars.com/" target="_blank">TechStars</a>) do seem to achieve better outcomes. The evidence for incubators is similarly inconclusive. <br /><br />We find that more specialist programmes (single industry) help survival compared to more generalist programmes. For incubators, training seems to be more effective than networking, although neither has much impact. <br /><br />Significantly, what goes on outside the building also seems to matter. For incubators, having university involvement is helpful (although this doesn't apply when individual academics step in). Two accelerator studies find that programmes in regions with denser entrepreneurial networks and high property values achieve better employment and funding effects. Not surprisingly, firms in these programmes are more likely to get funding from local investors. <br /><br />We also look at co-location of researchers, often academics. Results complement the findings for firms. Very close co-location seems to raise the quality/quantity of collaborations. Spillovers are biggest in closely related fields. It’s striking that both permanent and temporary co-location can help drive up these outcomes. <br /><br />* <br /><br />Overall, we were impressed by how much high quality evidence already exists for accelerator and incubator impacts. We hope local policymakers will be able to work productively with providers to fill in some of the remaining gaps. Many of these are around how programmes achieve their overall effects, and how to consistently replicate this. More broadly, we also need to test accelerators against incubators, and against traditional business support. We also need a clearer sense of programmes' cost-effectiveness. We're not able to find cost data for incubators in the available studies - but in <a href="http://www.whatworksgrowth.org/resources/business-advice-toolkit-incubators" target="_blank">the</a> <a href="http://www.whatworksgrowth.org/blog/business-advice-toolkit-accelerators" target="_blank">toolkits</a> we provide some back-of-the-envelope numbers suggesting that accelerators are pretty expensive to run. <br /><br />There are also some broader academic questions about how these very micro-scale interventions affect larger-scale urban processes. For instance, we know that clusters are characterised by <a href="https://academic.oup.com/oxrep/article-abstract/29/2/383/523704?redirectedFrom=fulltext" target="_blank">positive and negative feedback loops</a>. Productivity effects grow with cluster size, as the set of knowledge spillovers gets larger and richer; at the same time, growing clusters become progressively more crowded and expensive, often displacing smaller or newer firms. <br /><br />Co-working-based interventions can - in theory - simultaneously increase cluster productivity for a given size (by enabling innovation and entrepreneurship) and flatten the cost curve (by more densely co-locating firms in physical space).What might be the effect size of such provision, at what scale, and how might such interventions shape cluster trajectories? There is a big and fascinating agenda to explore here. Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-40718245101778378372018-09-24T11:54:00.001+01:002018-09-24T11:54:36.687+01:00There is a housing crisis: there are not enough houses being built and they are becoming ever less affordable; and they are getting smaller…<b>[By Prof Paul Cheshire]</b><br />
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As a species we are very well honed not to face unpleasant facts. We mock the ostrich but humans have head-burying down to an art. Worried you might have cancer? Don’t worry the doctor – she might confirm it. <br />
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But we can do better than deny the danger: we can create for ourselves an alternative story to reassure. Climate change is a major threat? Roll out Nigel Lawson to paint an alternative reality. Brexit is likely to be seriously damaging to our prosperity? Roll out Boris Johnson to imagine a rosier world: oh – or, of course, the all-purpose danger denier – Nigel Lawson.<br />
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And so it is with housing. A long term and endemic lack of housing supply? Ian Mulheirn <a href="https://medium.com/@ian.mulheirn/how-economists-should-think-about-the-housing-market-ff92e4b7201b">will explain why that is not so</a>. And now houses are getting too small and there i<a href="https://www.architecture.com/-/media/gathercontent/space-standards-for-homes/additional-documents/ribacaseforspace2011pdf.pdf">sn’t room to swing a cat</a>? No worries: Dr Chris Foye, from the newly funded Collaborative Centre for Housing Evidence <a href="https://www.bbc.co.uk/news/business-45420795">can resolve your worries</a>. Contrary to what other researchers and agencies have been saying he can reassure you not only are houses really getting bigger but we do not want more space in houses anyway. So that is both ends covered: we do not have to worry about shrinking living space.<br />
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We dealt with Ian Mulheirn’s ‘no shortage’ claims <a href="http://spatial-economics.blogspot.com/2018/03/">in a recent blog</a>. So what about this most recent claim? All the authorities and surveys of which we are aware show significant falls in the size of new houses built in Britain (or England depending on source); and at the same time they show how much smaller new build houses are in Britain/England than in other comparable countries: <a href="https://www.boverket.se/en/start/publications/publications/2005/housing-statistics-in-the-european-union-2004/">38% smaller than in Germany and 40% smaller than in the land-strapped Netherlands in 2005</a>.<br />
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It is true that there is a wealth of folk legend in measuring house sizes and some factoids of dubious provenance (<a href="https://jamesjgleeson.wordpress.com/2017/02/11/the-myth-of-the-shrinking-british-home/">here's an example</a> of how a number of 76 metre squared for the average size of a UK house or new build came to be built in to ‘knowledge’.) We may legitimately have concerns as to the reliability of comparative house size data but the pattern does seem to be consistent. The most recent <a href="https://www.bmdw.gv.at/Wirtschaftspolitik/Wohnungspolitik/Documents/housing_statistics_in_the_european_union_2010.pdf">official publication giving EU wide comparisons </a>shows English houses were small by rich EU country standards and getting smaller: the average size of existing houses was given as 87m2 while that of more recently built houses was 83m2 with only Romania and Italy having smaller new build houses; and Denmark having new homes averaging 132m2. <br />
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Dr Foye however, claims new build houses are getting bigger in England – from 88m2 in 2004 to 90m2 in 2016. Examining the details of the source he cites for this however reveals it is spurious. It relates to the size of homes sold: very different from new homes. As the ONS helpfully explain: <br />
<i>… floor space [has] seen small increases over the period with the biggest shift seen between 2008 and 2009. During this period there was an increase in the proportion of detached properties purchased … and a respective fall in the proportion of flats. As flats tend to be smaller than houses this contributed to the growth seen in floor space … between 2008 and 2009. Since 2012, while the proportion of detached properties has remained broadly consistent, the proportion of flats purchased has increased. This has reduced the average … floor space slightly, but it is still above 2004 levels.</i><br />
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In other words, what Dr Foye is talking about is not the size of new build houses but the size of houses currently being sold. And that will, of course, be strongly influenced by <a href="http://eprints.lse.ac.uk/65016/">the composition of sales</a>. The claimed increase in new house sizes is an artefact of more detached properties being sold during the financial crisis years; not evidence that house sizes are increasing.<br />
A longer term but less well documented source is <a href="https://www.labcwarranty.co.uk/blog/are-britain-s-houses-getting-smaller-new-data/">here</a>. This is not peer reviewed research but was based on samples of houses available on popular property websites and using their dates of construction and details to derive average size of rooms and total floor area by decade built. This, too, could be subject to composition bias but it is less likely to have been a problem with this measure since that would require there to have been systematic differences in the composition of sales varying by year of construction. The conclusion was that houses were biggest if built in the 1970s when they averaged 83m2. Floor area then fell pretty steadily decade by decade to post 2010 when the size was just 68m2 – smaller than those built in the 1930s.<br />
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One possible reason house sizes could be getting smaller is that family sizes are falling. But at the same time over the 50 years since 1970 incomes have risen and we know there is<a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1468-0084.00104"> a strong income elasticity of demand for space</a> implying house sizes should have increased. And they did in almost all other countries with rising real incomes over time. So falling real incomes since the financial crisis might explain a post-2010 size reduction in new build sizes but over the longer term the expectation would be – if supply was able to respond to the changing structure of demand – new build houses would have got a lot bigger between 1970 and 2015. Indeed there is even some evidence that, independently of income, the <a href="https://econpapers.repec.org/article/eeejhouse/v_3a26_3ay_3a2014_3ai_3ac_3ap_3a19-32.htm">demand for space in houses increases with age</a>. And as we know the population of England has been aging since 1970 – this would again suggest that if supply was not constrained in some relevant way, houses would have got bigger.<br />
<br />
To be fair to Dr Foye his claim that we really do not want bigger houses anyway seems to be more a subeditor pitching for a good headline than it reflects <a href="https://link.springer.com/article/10.1007/s10902-016-9732-2">the contents of his research</a>. There may be an argument to be had - what does one mean by ‘want’? But it is my judgement that at least in terms of effective demand, the evidence is overwhelmingly that as people get richer they demand more space in homes and that the UK planning system frustrates this demand by constraining land supply.Prof Henry G. Overmanhttp://www.blogger.com/profile/15203876610491317062noreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-3716031909293664302018-08-07T17:13:00.000+01:002018-09-27T10:46:01.959+01:00The Beeching Axe: the consequences of massive rail disinvestment<div class="MsoNormal" style="line-height: 150%;">
<b><span style="font-size: small;">By Steve Gibbons, Stephan Heblich and Ted Pinchbeck</span></b><br />
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<div>
<span style="font-size: small;"> </span></div>
<span style="font-size: small;">Did pulling up nearly half of Britain’s railways in the 1950s, 60s and 70s affect where people chose to live? Did it bring about the demise of rural communities and the ascendance of metropolitan areas? While some argue that it did, an alternative view is that these changes in population patterns were already occurring and that the cuts to rail lines and stations were simply an <a href="https://www.bbc.co.uk/news/uk-21938349" target="_blank">inevitable response to unprofitability</a> in the face of changing patterns of demand. Our new research (Gibbons, Heblich and Pinchbeck, 2018, Centre for Economic Performance Discussion Paper <a href="http://cep.lse.ac.uk/pubs/download/dp1563.pdf" target="_blank">1563</a>), on the consequences of the removal of the railways –the ‘Beeching Axe’, as the cuts in the 1960s came to be known – provides some answers to this long standing question.</span><br />
<span style="font-size: small;"><br />
</span> <span style="font-size: small;">The headline answer is that, populations in places losing their rail access declined relative to those where rail access was retained. While it is true that rail lines and stations were preserved in places where population was already growing before the 1950s, it is the loss of rail access, rather than any pre-existing population trends that explain subsequent population patterns in affected areas. These patterns had emerged by the 1980s and have persisted. If the cuts hadn’t happened, populations would have been considerably more evenly distributed across Britain at the end of the 20th Century. The London commuting area would have had 9% less population in 2001, but so would other major cities such as Birmingham, Manchester and Glasgow. Much of North West and central England gained population because of the rail cuts in the 1950s and 60s relative to areas in the South West, Wales and Scotland. The map below illustrates the what the populations of Britain’s travel to work areas would have looked like if the cuts hadn’t happened. The white and light grey areas indicate places where the population would be lower than it is now, the darker grey areas where it would be higher.</span><br />
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</span> <br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_ZwSZLWOu0r_mzmr5OFFE1rs8FVtEW8Chvt9TSOzI7eXQ6zOEkgUg-hkTf5uB6hAPsSOlHhCSRBOrTfpEbFO0tnNNGMT7GU92xQEp9rVmTnAiSlSakkm8eTxma8cQuRWXDM7_RvfCQ_0/s1600/TTWA+populations+blog.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1600" data-original-width="1132" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_ZwSZLWOu0r_mzmr5OFFE1rs8FVtEW8Chvt9TSOzI7eXQ6zOEkgUg-hkTf5uB6hAPsSOlHhCSRBOrTfpEbFO0tnNNGMT7GU92xQEp9rVmTnAiSlSakkm8eTxma8cQuRWXDM7_RvfCQ_0/s640/TTWA+populations+blog.png" width="451" /></a></span></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><div class="MsoCaption" style="line-height: 150%;">
<span style="font-size: small;"><a href="https://www.blogger.com/null" name="_Ref520292549"><span style="font-family: "times new roman" , "serif"; line-height: 150%;">Figure</span></a><span style="font-family: "times new roman" , "serif"; line-height: 150%;"> 1: Counterfactual log population changes, without rail cuts, Travel to Work Areas, 2001<o:p></o:p></span></span></div>
</td></tr>
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<span style="font-size: small;"></span> <span style="font-size: small;">So what happened to rail in the mid-20th Century, and how did this affect places’ accessibility? There had been rapid and largely unregulated growth in the supply of rail infrastructure during the 19th Century, and by the mid-20th Century, with increasing use of roads, the rail network was losing money. Unprofitable lines began to close, a process accelerated by the infamous ‘Beeching report’</span><span style="font-size: small;"> - <a href="http://www.nationalarchives.gov.uk/documents/press-release-reshaping-british-railways.pdf" target="_blank">The Reshaping of British Railways 1963</a> - </span><span style="font-size: small;">which proposed a radical programme of cuts.</span><br />
<span style="font-size: small;"><br />
</span> <br />
<span style="font-size: small;">Figure 2 below illustrates the patterns of 1951-1981 changes in a rail accessibility index, at parish level – parish being the units on which historical census data is available. To measure rail access, we use a ‘closeness centrality’ index (sometimes called a market access index) which adds up how many destinations can be reached from an origin, with less weight on destinations with longer journey times. Bigger negative numbers mean a bigger cut. We have overlaid lines showing the rail lines that were cut from the network. The cuts were brutal. Around 40% of the lines in Britain went over this period. Even where lines were retained, many stations were closed - about 60% of them in all. Evidently, these cuts had the biggest effects in areas outside the cities, particularly outside London and the South East (the north of Scotland doesn’t lose much either, because it had little coverage to begin with).</span><br />
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</span> <br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZGL9Av9LPiLKz4f-wYPWc0rZ16OmKpFb-XjgLIx9sY9I3nlphG1n9Eg0dQU08Y0mv8isu2udIzwjKBanMC0mkp3ru_pJ2Q645dRklDcLWJ60unM1FZ82kCZcZvmfhmyzKmEwFyP2hnVU/s1600/Cuts+blog.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1600" data-original-width="1132" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZGL9Av9LPiLKz4f-wYPWc0rZ16OmKpFb-XjgLIx9sY9I3nlphG1n9Eg0dQU08Y0mv8isu2udIzwjKBanMC0mkp3ru_pJ2Q645dRklDcLWJ60unM1FZ82kCZcZvmfhmyzKmEwFyP2hnVU/s640/Cuts+blog.png" width="452" /></a></span></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="font-size: small;">Figure 2: Rail lines cut and changes in centrality/accessibility at parish level, 1951-198</span></td></tr>
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<span style="font-size: small;"></span> <span style="font-size: small;">It is these changes that we see played out in terms of population patterns in Figure 1 above, according to our statistical analysis. We also find changes in other demographic characteristics – populations in parishes losing rail access became less skilled and older. To carry out these analyses we link historical population census data at parish level to the centrality changes shown in Figure 1. We then estimate the statistical association between the change in centrality and the change in rail access, taking careful account of pre-existing population trends, and alternative explanations for subsequent population changes – like rural/urban differences, planning of new towns, and motorways. We also check that we don’t find comparable effects for stations that were proposed for closure in the infamous ‘Beeching report’, but were never actually closed.</span><br />
<span style="font-size: small;"><br />
</span> <span style="font-size: small;">One might think that the construction of the motorways and faster car journey would have compensated for these rail cuts. We look at this, finding that populations shifted with the construction of the motorway network too. Places that experienced improvements in accessibility through the motorway network were less affected by the rail cuts. Unfortunately, the places losing rail access were not those targeted by improvements in road access - the changes in rail and road centrality are unrelated to each other - so the motorway network in Britain would have done little to compensate the places worst affected by loss of rail.</span><br />
<span style="font-size: small;"><br />
</span> <span style="font-size: small;">So what are the lessons for today from these historical facts? The most general point is that transport shapes the spatial economy. This probably seems obvious, but empirical evidence on the way the spatial organisation of economic activity evolves in relation to changes in transport networks is only recently beginning to emerge. This evidence adds to that picture. The unique perspective it brings is that not only does activity reorganise when transport is improved, as shown by previous evidence, but it also reorganises when transport is destroyed.</span><br />
<span style="font-size: small;"><br />
</span> <br />
<span style="font-size: small;">Do the results mean that the opening of HS2 will cause everyone to move to the north, or would re-opening large swathes of disused railway relax the pressure on densely populated areas? This is probably far-fetched, given the shape of the modern day economy, the dominance of road and the promise of new transport technology. Though there has been a <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/661933/tsgb-2017-report-summaries.pdf" target="_blank">resurgence in rail use</a> in the 21st century so the demand for rail is evidently there and, as our evidence shows, populations will shift to places with better transport access.</span></div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-49178853642681964172018-07-11T17:35:00.001+01:002018-07-11T17:35:40.906+01:00Turning Brownfields Around: the Role of Demand in Land Re-Development<div dir="ltr" style="text-align: left;" trbidi="on">
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<div class="MsoNormal" style="text-align: justify;">
Land demand is high in cities.
Cities have access to good jobs, people and specialized consumption services. High
demand and the limited supply of urban land translate into high land prices. In
turn, high prices promote high density land uses. If a parcel in the square
mile costs hundreds of millions, expect to find a tall office building there
rather than a bucolic bungalow. Despite all this, it <i style="mso-bidi-font-style: normal;">is</i> common to find vacant or severely underused land in cities. Old
factories, derelict dwellings, abandoned car parks; all are common images from
urban life. But, for an economist, this is quite surprising. Is it that some
land is simply unresponsive to demand conditions? </div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Having a good answer to this
question is important. Unused land makes our cities larger and our commutes
longer. In stark distinction with parks, or undeveloped green-field land, abandoned
previously-developed parcels are usually quite unpleasant (in econ-talk, they
generate strong negative externalities). Planning authorities and local
governments often have specific policies to promote land re-development, by
offering tax breaks, grants or financing options to developers of infill land.
Understanding how demand affects re-development helps us to anticipate whether
these policies will be successful. Moreover, it also gives us a hint on whether
or not market forces can themselves achieve the goal of re-developing these
sites.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
In a recent Centre for Economic
Performance, Urban and Spatial Programme <a href="http://cep.lse.ac.uk/pubs/download/dp1549.pdf">discussion paper</a>, I
address this question by using data on brownfields across England. As you may
know, in the UK <i style="mso-bidi-font-style: normal;">brownfield </i>is the
name usually given to land which was previously developed but is currently
underused or vacant. Policies fostering redevelopment of brownfield land in
priority over green-field (“brownfield-first”) have been a feature of the
planning system at least since the 1990s and have seen some resurgence of
interest in <a href="https://www.gov.uk/government/news/brownfield-sites-to-be-prioritised-for-development">recent
years</a>. Whether these policies are actually effective in encouraging
brownfield re-development in response to housing demand remains unclear.<span style="mso-spacerun: yes;"> </span>In this paper, I use data on brownfield sites
to test whether the prevalence of empty land in cities is indeed sensitive to
demand conditions. In essence, I want to test whether high demand (or high
price) areas are more likely to be re-developed than otherwise identical areas
where demand is lower. The resulting estimate measures the price sensitiveness
of brownfield re-development. If you are versed in economics, this is like
estimating a price elasticity of land supply. There are several challenges when
trying to estimate these parameters properly. I briefly discuss them below in
case you are interested.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
My findings indicate that
brownfield re-development is indeed affected by local demand conditions. In the
long run, re-development follows demand. Quantitatively, a 1% increase in
prices leads to a 0.07% decrease in the probability of having brownfield land
in a given hectare. This number looks very small but the baseline probability
of finding brownfield land in my sample is also low, standing at roughly 1.5%.
Hence, I conclude that price differences can induce substantial variation in
the presence of empty land in our cities. Importantly, this is the case despite
the tight planning restrictions that characterize the UK. This is not to say
that planning restrictions cannot influence re-development. In my paper, I show
that re-development of parcels in areas with tougher planning (such as the
South East) is less sensitive to demand conditions.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
To sum up, my results show that
market forces do affect brownfield development in the long run.<a href="https://www.blogger.com/blogger.g?blogID=974562301377041914#_ftn1" name="_ftnref1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: "Calibri","sans-serif"; font-size: 11.0pt; line-height: 115%; mso-ansi-language: EN-GB; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[1]</span></span></span></span></a>
According to my estimates, a large but plausible increase of prices of roughly
20% would lead to re-development of a large fraction of brownfields in English
cities. It also suggests incentive based policies such as grants or tax breaks
could, at least in principle, achieve substantial long-run re-development. Finally,
the paper shows that equilibrium land supply is neither fixed nor determined
exclusively by sprawl; it can also be shaped by development within the cities’
footprint.<span style="mso-spacerun: yes;"> </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<b style="mso-bidi-font-weight: normal;">Technical Details</b></div>
<div class="MsoNormal" style="text-align: justify;">
My analysis is based on data for previously-developed
land sites in England, as recorded in the National Land Use Database of
Previously Developed Land (NLUD-PDL). I use the 2007 version of this dataset,
but newer versions can be found <a href="https://www.gov.uk/government/collections/national-land-use-database-of-previously-developed-land-nlud-pdl">online</a>.
Data on prices are obtained from the land registry and data for land use
changes are obtained from the Land Use Change Survey. </div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="mso-spacerun: yes;"> </span>There are a few technical hurdles we have to
overcome before we can obtain credible estimates of the price sensitivity of
re-development. On the first place, because brownfield sites tend to generate
negative externalities on nearby residents, they themselves affect prices. A
growing literature has made this case over the last decade.<a href="https://www.blogger.com/blogger.g?blogID=974562301377041914#_ftn2" name="_ftnref2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: "Calibri","sans-serif"; font-size: 11.0pt; line-height: 115%; mso-ansi-language: EN-GB; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[2]</span></span></span></span></a>
As a result, there is substantial scope for reverse causality, from vacant
sites to prices. In addition, re-development costs may be correlated with
amenities that affect land prices directly. For example, in a monocentric city,
low amenity areas away from the city centre may be harder to re-develop because
of reduced accessibility. Other confounders, such as differences in the type of
sites (e.g. residential vs. industrial) in different areas could also bias
naïve estimates.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
In order to overcome this problem
I need a demand shifter, a variable that affects demand without affecting
supply conditions. In this study, I use school quality as my demand shifter. A
long literature has documented price effects of school quality in residential
markets and the UK is not an exception (see for example Gibbons, Machin and
Silva, 2013). Combining data from school quality with detailed maps, I
implement a two-stage boundary discontinuity design which uses school quality
as an instrument in a regression of brownfield location variables on prices.
The boundary discontinuity design uses school admission boundaries to ensure I
am comparing locations which are very close to one another but have access to
primary education of different quality. This method is what allows me to obtain
credible estimates of the price sensitivity of re-development. </div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
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" /></div>
<div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: center;">
<span style="mso-fareast-language: EN-GB; mso-no-proof: yes;"></span></div>
<div class="MsoNormal" style="line-height: normal; margin: 0cm 0cm 0.0001pt 42.55pt; text-align: center;">
Note: See Figure
description in the text.</div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: 42.55pt; margin-right: 0cm; margin-top: 0cm;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
An illustration of the result is
provided in the figure above. The horizontal axis represents distance to a
school-admission (county) boundary, with negative distances corresponding to
the side with<span style="font-family: "Arial","sans-serif"; font-size: 8.0pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB;"> </span>low
average school quality and positive distances corresponding to the side with
high average school quality. The vertical axis measures the probability that a
given hectare contains brownfield land. Fourth degree polynomials fitted on the
raw data represented in solid lines. The discontinuity observed in the middle
of the figure shows that brownfield land is less common in high demand
locations. More details can be found in the <a href="http://cep.lse.ac.uk/pubs/download/dp1549.pdf">paper</a>. </div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<b style="mso-bidi-font-weight: normal;"><span style="font-size: 14.0pt; line-height: 115%;">References</span></b></div>
<div class="MsoNormal" style="text-align: justify;">
Gamper-Rabindran, S., &
Timmins, C. (2013). Does cleanup of hazardous waste sites raise housing values?
Evidence of spatially localized benefits. <i>Journal of Environmental Economics
and Management</i>, <i>65</i>(3), 345-360.<b style="mso-bidi-font-weight: normal;"><span style="font-size: 14.0pt; line-height: 115%;"></span></b></div>
<div class="MsoNormal" style="text-align: justify;">
Gibbons, S., Machin, S., &
Silva, O. (2013). Valuing school quality using boundary discontinuities. <i>Journal
of Urban Economics</i>, <i>75</i>, 15-28.<b style="mso-bidi-font-weight: normal;"><span style="font-size: 14.0pt; line-height: 115%;"></span></b></div>
<div class="MsoNormal" style="text-align: justify;">
Greenstone, M., & Gallagher,
J. (2008). Does hazardous waste matter? Evidence from the housing market and
the superfund program. <i>The Quarterly Journal of Economics</i>, <i>123</i>(3),
951-1003.<b style="mso-bidi-font-weight: normal;"><span style="font-size: 14.0pt; line-height: 115%;"></span></b></div>
<div style="mso-element: footnote-list;">
<br clear="all" />
<hr align="left" size="1" width="33%" />
<div id="ftn1" style="mso-element: footnote;">
<div class="MsoFootnoteText">
<a href="https://www.blogger.com/blogger.g?blogID=974562301377041914#_ftnref1" name="_ftn1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: "Calibri","sans-serif"; font-size: 10.0pt; line-height: 115%; mso-ansi-language: EN-GB; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[1]</span></span></span></span></a> My
estimates however, are based on very long run changes. Anecdotal evidence shows
that re-development can take a long time. It took 50 years to re-develop the
areas around the London Royal Docks or Battersea Power station.</div>
</div>
<div id="ftn2" style="mso-element: footnote;">
<div class="MsoFootnoteText">
<a href="https://www.blogger.com/blogger.g?blogID=974562301377041914#_ftnref2" name="_ftn2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: "Calibri","sans-serif"; font-size: 10.0pt; line-height: 115%; mso-ansi-language: EN-GB; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[2]</span></span></span></span></a>
See for example the contributions in Greenstone and Gallagher (2008) and
Gamper-Rabindran and Timmins (2013).</div>
</div>
</div>
</div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-18716728361940016642018-06-14T06:53:00.001+01:002018-06-14T15:29:20.925+01:00Did the Blitz enhance London’s economy?<div class="gmail-western" style="line-height: 105%; margin-bottom: 7.95pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;">
</div>
<div class="gmail-western" style="line-height: 105%; margin-bottom: 7.95pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;">
<b>By Gerard Dericks & Hans Koster</b></div>
The Blitz lasted from Sept 1940 to May 1941, during which the Luftwaffe dropped 18,291 tons of high explosives and countless incendiaries across Greater London. Although these attacks have now largely faded from living memory, our recent CEP Urban and Spatial Programme discussion paper ”<a href="http://cep.lse.ac.uk/pubs/download/dp1542.pdf">The Billion Pound Drop</a>” shows that the impact of the Blitz remains evident to this day in London in both its physical landscape and economy.<br />
<br />
Figure 1: Greater and Inner London Blitz Bomb Density<br />
<br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7lW6xSic9hjxiVLimN0z6J8SR_Zsn8VFxTtoqkurBKwbP109-7rmWTVCxkHVoSVcF8GHzea8zJ4f-snp3iID727PFvhm5zFGHfCAotMDryR79lwyiTG4IljCY1mxXeSLYUwamSf5mfYk/s1600/Blitz+1.png"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7lW6xSic9hjxiVLimN0z6J8SR_Zsn8VFxTtoqkurBKwbP109-7rmWTVCxkHVoSVcF8GHzea8zJ4f-snp3iID727PFvhm5zFGHfCAotMDryR79lwyiTG4IljCY1mxXeSLYUwamSf5mfYk/s640/Blitz+1.png" /></a><br />
<br />
Using recently <a href="http://bombsight.org/#15/51.5050/-0.0900">digitised</a> National Archive records on the locations of all bombs dropped during the Blitz (see Figure 1 above), we compare the locations of Blitz bomb strikes with local differences in London’s modern-day building heights, employment levels, and office rental prices. After controlling for the central concentration of bombs, we find that local areas which were more heavily bombed during the Blitz have more permissive development restrictions, more office space, and consequently higher worker densities today. For example, as Figure 2 below illustrates, the eastern core of the City of London was particularly heavily bombed, and is today one of the few areas in the City of London where tall buildings are permitted. <br />
<br />
Figure 2: City of London Bomb Strikes and 10 Tallest Buildings<br />
<br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhI14hbwoVlN-ku2zwlLyYjJU23mBrWuZh3LB-pl1MYwLqbafA6eQMqBOThy0g4Eraqv7m48yUk6gHl4KCbMdzA1rGwsSmsdfli8Esd9p8eV-AFJX6OJnoVwmrh_VaUtiHqytm_ym44Zp4/s1600/Blitz+2.png"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhI14hbwoVlN-ku2zwlLyYjJU23mBrWuZh3LB-pl1MYwLqbafA6eQMqBOThy0g4Eraqv7m48yUk6gHl4KCbMdzA1rGwsSmsdfli8Esd9p8eV-AFJX6OJnoVwmrh_VaUtiHqytm_ym44Zp4/s640/Blitz+2.png" /></a><br />
<br />
Consistent with considerable empirical <a href="http://cep.lse.ac.uk/_new/publications/abstract.asp?index=5314">evidence</a> from other cities, the consequence of this higher worker density in London has been greater worker productivity (which we proxy with office rents). What is new about this research, however, is the magnitude of measured effects. Whereas previous research has primarily sampled secondary cities and has generally found that a doubling in worker density raises productivity by only about 5% (as measured by wages), even after extensive sensitivity tests our paper shows an increase in London of 25%. We argue that this difference is largely due to London’s unique position as perhaps the world’s foremost financial and commercial centre, and that the benefits of greater worker density here are likely to be exceptionally large.<a href="https://www.blogger.com/null"></a><br />
<br />
City planners are tasked with controlling development in order to separate incompatible land uses and mitigate costs of congestion such as traffic. However, these restrictions (especially building height limits) entail various costs, for example, <a href="http://www.spatialeconomics.ac.uk/SERC/publications/abstract.asp?index=3464">higher property prices</a> and <a href="http://www.spatialeconomics.ac.uk/SERC/publications/abstract.asp?index=3464">greater price volatility</a>, but equally significant is the fact that constraining worker density damages the productivity of the economy. For many historical reasons London has one of the <a href="http://eprints.lse.ac.uk/4372/1/Office_space_supply_restrictions_(LSERO_version).pdf">most restrictive</a> planning regimes in the developed world. Based on back-of-the-envelope calculations, we estimate that the value of the Blitz to London in having reduced the restrictiveness of its planning regime is £4.5bn annually, equivalent to 1.2% of London’s GDP (assuming that, without the Blitz, London's density would have been constrained to what it is in non-bombed areas of the city).<br />
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Ideally, planners would calibrate the stringency of development controls to ensure that society makes the <a href="https://www.sciencedirect.com/science/article/pii/S0094119002000037">best trade-off</a> between the costs and benefits of greater worker densities. However, in order to make this judgement, planners require accurate information on both these costs and benefits. What our research now shows is that for the case of London, and perhaps other global cities such as New York and Tokyo, the benefits of greater worker density appear to be much larger than anyone had previously surmised. Consequently, if welfare maximization is indeed city-planners’ primary goal, then, at least in those cities, planners should now be reviewing the stringency of their height restrictions and new development controls more generally. <br />
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The Blitz was a tragic episode in London’s history, the likes of which one only hopes will never be repeated. However, by locally relaxing the restrictive planning regime put in place after the war, for all its human cost, the Blitz has subsequently had an extremely positive effect on London’s present day economy. Furthermore, this lasting influence has now provided us with unique insights into our understanding of urban economics, and spotlights the exceptional dynamism of this enduring city.Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-82827876264273563542018-06-12T06:00:00.000+01:002018-06-12T06:47:40.161+01:00Inclusive Growth in cities: Good intentions, difficult policy Posted by Neil Lee, Department of Geography and Environment and SERC<br />
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Inclusive Growth - a concern with the pace and pattern of growth - has become a new mantra in local economic development. The phrase was barely used up until about 2009 (see figure 1). But interest has increased significantly since the financial crisis. The term first influenced development, with organisations such as the World Bank taking it up. But it has since spread into urban and regional policy in the developed world. The OECD have launched an ‘<a href="http://www.oecd.org/inclusive-growth/about/inclusive-cities-campaign/all-on-board-for-inclusive-growth-in-cities-remarks-at-habitat-iii.htm" target="_blank">Inclusive Growth in Cities</a>’ programme, the RSA launched a high profile report <a href="https://www.thersa.org/action-and-research/rsa-projects/public-services-and-communities-folder/inclusive-growth-commission" target="_blank">on Inclusive Growth</a>, and an <a href="https://www.mui.manchester.ac.uk/igau/" target="_blank">Inclusive Growth Analysis Unit</a> (IGAU) has been established at the University of Manchester.<br />
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<i>Figure 1. Google searches for Inclusive Growth and Pro-poor Growth</i><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgxzW2pm2FVWz5-WtYDFpJIF7TuvoEee-Jtj3uU7rI3HVy2OgSLqnx6CogOHQXvkWjCDJKHD4T6Z8zZbNtYByVdZqVRn9IG98uUWGnR7F1yJuFeEIGQQHvglwKGblzSVdPPhO1kBXXer0zB/s1600/Screen+Shot+2018-06-11+at+21.38.10.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="718" data-original-width="1600" height="284" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgxzW2pm2FVWz5-WtYDFpJIF7TuvoEee-Jtj3uU7rI3HVy2OgSLqnx6CogOHQXvkWjCDJKHD4T6Z8zZbNtYByVdZqVRn9IG98uUWGnR7F1yJuFeEIGQQHvglwKGblzSVdPPhO1kBXXer0zB/s640/Screen+Shot+2018-06-11+at+21.38.10.png" width="640" /></a></div>
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<span lang="EN-US"><i>Note: Data from Google Trends. Height of each line gives indication of share of searches containing each term. </i><o:p></o:p></span></div>
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It is hard not to be sympathetic to the basic idea of Inclusive Growth. It is a positive way to link two problems - declining living standards for many and low growth. It is more optimistic, and less politically loaded, than a focus on inequality. But how useful is it for policy? In a <a href="https://www.tandfonline.com/doi/full/10.1080/00343404.2018.1476753" target="_blank">new paper</a> published in Regional Studies, I argue that while there is much to like in this new policy agenda, there are significant problems operationalising Inclusive Growth at a city level. Inclusive Growth is a classic ‘<a href="http://www.tandfonline.com/doi/abs/10.1080/0034340032000108796" target="_blank">fuzzy concept</a>’ as described by Anne Markusen, with researchers and policymakers using the same term but often describing different concepts. It is a conceptual Rorschach (inkblot) test onto which people project their own particular interests.<br />
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The question is whether this fuzziness matters for policy. In some respects, it doesn’t. Efforts from cities to address problems of disadvantage and inequality are welcome, and Inclusive Growth provides cover for them to do that. While the precise definitions are fuzzy, the general direction is clear. If cities can do anything to help inclusion then that is better than nothing.<br />
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But definitions do matter for policy. ‘Growth’ is a clearly understood if highly imperfect indicator - politicians are judged on the performance of the national economy. When policymakers aim to hit precise targets they are more likely to do so (famously, <a href="http://sticerd.lse.ac.uk/dps/case/spcc/rr01.pdf" target="_blank">New Labour hit virtually every social policy metric they aimed for</a> - but doing so led to some unintended consequences). These measurement issues are important right now as civil servants try and work out how to replace European Funding. What should the targets be of the Shared Prosperity Fund: simply GVA or employment growth, or something which also measures inclusivity?<br />
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Precise targets also help policymakers make choices. Like economics, policymaking is often about tradeoffs, particularly given the stretched budgets and tough choices faced by local government. If Inclusive Growth becomes the target, a clear definition would help policymakers choose between competing priorities and focus investment. If the definition is too broad, Inclusive Growth is less useful for policymakers.<br />
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Even if they do have clear targets, there is little evidence on what the best interventions would be. The <a href="http://www.whatworksgrowth.org/" target="_blank">What Works Centre</a> has highlighted the limited evidence for many general economic development interventions (although some argue they have set the bar high). There is even less evidence on the more specific target of Inclusive Growth. The JRF, OECD, IGAU and others are all developing frameworks and considering interventions right now (disclosure: I have a horse in this race, having produced several reports for the JRF). But it will take time for an evidence base to develop. The policy initiatives are outrunning the evidence.<br />
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The measurement issues matter. But even if they are solved, there is another, more fundamental problem with applying Inclusive Growth at the local level: local government often lacks the powers or ability to create growth, let alone shape it. The UK is both highly centralised and characterised by large regional disparities, which policymakers have found it hard to address. An Inclusive Growth strategy is unlikely to solve these problems.<br />
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But there is also a strong defence for the new focus on Inclusive Growth. Much economic development policy simply assumes benefits ‘<a href="http://eprints.lse.ac.uk/66296/1/Lee_Is%20there%20trickle%20down%20from%20tech.pdf" target="_blank">trickle-down’ to disadvantaged groups</a>. While imperfect, Inclusive Growth does at least focus attention on this. Rather than thinking about it as a specific concept, it might - as <a href="http://hummedia.manchester.ac.uk/institutes/mui/igau/IGAU-Consultation-Report.pdf" target="_blank">Ruth Lupton and Ceri Hughes argue</a> - be better to think about it as a general policy agenda, which needs to be considered but does not necessarily form the sole focus of policy. While imperfect, the Inclusive Growth agenda is better than one which simply ignores distributional concerns.Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-53295447554717205152018-05-16T11:04:00.000+01:002018-05-16T11:04:25.167+01:00The ‘Bedroom Tax’: How did families react? Did the policy achieve its objectives? <h3>
By Steve Gibbons</h3>
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The ‘Bedroom Tax’ – or ‘under occupancy penalty’ or ‘removal of the spare room subsidy’ as it has been called officially – is a highly controversial part of the UK Government's recent social housing policy. The legislation was passed in April 2012 and came into effect in April 2013, and reduced housing benefits for social tenants – mainly council and housing association tenants - deemed to have a ‘spare’ bedroom.<br />
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The aim of the legislation was twofold. On the one hand, this was an attempt to curb increases in social housing expenditure. On the other hand, the Government was hoping to promote mobility and the reallocation of the limited social housing stock to better match households’ size and needs. However, the policy has been much criticised by housing <a href="https://england.shelter.org.uk/professional_resources/policy_and_research/policy_library/policy_library_folder/briefing_whats_wrong_with_the_bedroom_tax" target="_blank">charities </a>and in the media for its draconian regulation of low income tenants’ entitlement to space, the penalty it imposed on tenants who were the least able to afford it and for its potential adverse impacts on their welfare. Typically, households would have ended up with a spare bedroom through no fault of their own, due to children leaving home, or due to a lack of availability of smaller accommodation when they were originally housed.<br />
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Our recently published CEP Urban and Spatial Programme <a href="http://cep.lse.ac.uk/pubs/download/dp1537.pdf" target="_blank">discussion paper</a> is the first to look directly at what impact this ‘bedroom tax’ actually had on the tenants it affected. Whereas previous studies have simply asked a sample of tenants how they adjusted to the tax, we turn to an existing large scale survey of households who are followed year after year - the ‘Understanding Society’ longitudinal study. These data allow us to observe in detail how families actually reacted at the time the tax was introduced – in particular tracking whether they moved house.<br />
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The ‘bedroom tax’ legislation set out very specific rules regarding who in a household was entitled to their own bedroom and hence which households were deemed to have a spare bedroom. These rules were based number of adults and the age and gender of any children in the household. Anyone deemed as having one spare bedroom would face a 14% cut in housing benefit, while households with two spare bedrooms would face cuts of 25%.<br />
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These rules allow us to deduce which social tenant households in our data were affected by the policy and which weren’t. This means we can compare what happens to households who are affected by the policy because they had a spare bedroom, with very similar households who didn’t. We can see, for example, whether there is any difference in what happens to a family with two adults and two children (a boy and girl) under 10 living in a flat with three bedrooms – who would be considered to have a spare room under the policy rules – with a household with two adults with a boy and girl aged over 10 – who wouldn’t.<br />
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So how did families react, and did the policy achieve what it set out to do?<br />
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Firstly, our results show very clearly that affected households did lose housing benefits – around £8 per week on average - and experienced a drop in overall income. However, we are unable to find precisely how tenants adjusted to these cuts.<br />
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The first thing that is clear is that the policy did not encourage households to move. We find no difference between affected and unaffected households in the likelihood of moving when the policy was introduced. One concern of the policy’s critics was that it would force moves, increase neighbourhood turnover, deprive poor children of a stable learning environment and push individuals already at the risk of being detached from the labour market to areas with even fewer employment opportunities. This evidently did not happen to any great extent.<br />
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We do find though that when social tenants do move after the introduction of the bedroom tax, they down size to smaller accommodation. So the policy was partly successful in one of its aims –rationalising the use of publicly-funded housing, albeit more slowly than might have been hoped. Although the policy didn’t encourage moves, it did encourage movers to downsize, so in the long run under-occupancy of social housing might be reduced. This change will however only occur in conjunction with natural turnover of occupants of social housing.<br />
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Households who didn’t move appear to have just taken the hit to their resources, presumably cutting back on other areas of expenditure, though we don’t detect precisely on what dimensions. We find no systematic falls in spending on food or savings. There is little evidence that individuals in affected households worked more or less. In line with what was predicted by its critics, the policy appears to have reduced well-being, as captured by measures of material deprivation and self-reported life satisfaction. However, these effects are not precisely estimated or large (they are not ‘statistically significant’). This evidence indicates that the policy did further strain the finances and standards of living of individuals who were already disadvantaged.<br />
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So did the policy save the Government money? It was expected that the policy would affect <a href="https://www.gov.uk/government/news/housing-benefit-reform-removal-of-the-spare-room-subsidy-fact-sheet" target="_blank">660,000</a> households at the time it was introduced. Given the £8 per week benefits cut we observe in our data, this suggests direct savings of around £250 million per year – around <a href="https://www.whatdotheyknow.com/request/274781/response/671097/attach/3/FOI%202457%20fin%202016%206%2026.doc?cookie_passthrough=1" target="_blank">half the Government’s own estimates</a> of total savings. This simply amounts to a benefit cut for tenants who were unwilling or unable to move. These savings will also have been partly offset by the ‘discretionary payments’ that the government boosted in order to help support families adversely affected by the bedroom tax – around <a href="https://www.gov.uk/government/statistics/use-of-discretionary-housing-payments-financial-year-201516" target="_blank">£60 million per year</a> up to 2015/16.<br />
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So the bottom line is that the policy seems to have saved some public money – with the burden falling on the affected tenants - but will be slower than expected in achieving its aims of reducing social tenants’ use of bedroom space.Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-79573724047096614272018-05-03T08:22:00.000+01:002018-05-03T08:22:16.531+01:00Does gentrification displace low-income renters in Britain? In short: Yes!<b>
By Sevrin Waights</b><br />
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Gentrification is an ambiguous term, which roughly speaking means the replacement of poor residents in a community by the rich, and a related change in the character of the community and its amenities. There are two broad mechanisms for gentrification – displacement and succession. Displacement is where the influx of rich residents actually increases the likelihood that poor residents move away (e.g. due to higher housing costs). Succession implies that rich households simply move in after poor residents that moved away for other reasons.<br />
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The distinction is important because displacement implies gentrification may be harmful whereas succession implies that it is a more benign process. My latest <a href="http://cep.lse.ac.uk/pubs/download/dp1540.pdf" target="_blank">CEP Urban and Spatial Programme discussion paper</a> is the first study to provide empirical evidence that gentrification involves displacement of poor residents. While it’s true that several studies look at the question already, none of them find any evidence of displacement. Instead, these studies suggest that gentrification occurs through succession.<br />
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Displacement studies usually combine two types of data. Firstly, studies use data on the proportion of higher socioeconomic class households living in a neighbourhood (e.g. based on a Census). Neighbourhoods are then characterised as gentrifying or not according to whether there was a large increase in the share of high socioeconomic class residents over say ten years. Secondly, studies use data from longitudinal household surveys. Such datasets allow researchers to track individual households across all the different neighbourhoods they live in over the years. The usual approach is to link these data together in order to examine whether living in a gentrifying neighbourhood means households are more likely to move away. Previous studies find that poor households living in a neighbourhood characterised as gentrifying are no more likely to move away than poor households living in non-gentrifying neighbourhoods. This is interpreted as evidence that gentrification occurs through succession rather than displacement.<br />
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In my paper, however, I argue that previous estimates may be biased by the fact that different types of household (with different natural mobility rates) tend to live in different types of neighbourhood. This well documented phenomenon is called ‘sorting’ and means that previous studies might miss actual displacement. My approach makes use of year-to-year variation in winter temperatures in Great Britain. I argue that if displacement does happen, then it will be more pronounced in years with colder winters. The reason is that households will be less able to withstand rising rents resulting from gentrification if budgets are already stretched by higher fuel bills. This novel approach reveals a ‘causal’ effect because the type of household living in gentrifying neighbourhoods does not differ in cold years.<br />
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I use data from the UK Census to compute a measure of gentrification for every neighbourhood in Great Britain over two periods: the 1990s and the 2000s. Neighbourhoods are defined as gentrifying if there is an above-average increase in the share of residents with a university degree. Figure 1 illustrates my gentrification measure for London neighbourhoods in the 1990s (TTWA is the London Travel to Work Area, MSOAs are small census areas). Gentrification in the region, according to this definition, is evidently concentrated towards inner London but there are pockets elsewhere. I use this gentrification measure to estimate displacement effects for a sample of low-income private renter households from the British Household Panel Survey (BHPS). The BHPS is a survey of households that has been following a large sample of households since the 1990s, and so allows me to track which households move and when.<br />
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Figure 1: Gentrification index for London in the 1990s</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjby6tNFfFXOprGyqpNUU6eC_bhZoACKGfLhZMxXN7lhPIR1FYhXKUPvHhQkSu_bXxQdB7TPqThM0MzUq1ex9ETHIUJlDuKtrrc1VnMO5qQrYTUp1TV-oMqS8XNNseclElebOAi5kkEUeU/s1600/Gent+1.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="732" data-original-width="836" height="350" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjby6tNFfFXOprGyqpNUU6eC_bhZoACKGfLhZMxXN7lhPIR1FYhXKUPvHhQkSu_bXxQdB7TPqThM0MzUq1ex9ETHIUJlDuKtrrc1VnMO5qQrYTUp1TV-oMqS8XNNseclElebOAi5kkEUeU/s400/Gent+1.png" width="400" /></a></div>
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I find that that gentrification does displace low-income households. In fact, my estimates show that you need to have a household income of more than 1.5 times the average for the city and year to have no chance of being displaced. My findings also indicate that displacement may be avoided if gentrification occurs slowly enough. Figure 2 illustrates the size of displacement effect (left axis) relative to the speed of gentrification (bottom axis). The figure shows that there are no significant displacement effects resulting from small increases (or decreases) in neighbourhood degree share, i.e. a slow pace of gentrification. Households only start to be displaced when the degree share increases by 10 percentage points more than average (which equates to 0.1 on the bottom axis). These findings suggest a need to rethink gentrification and its consequences.<br />
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Figure 2: Displacement effects at different levels of gentrification</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEicfF-o_RuiwVaq7XaRfio22WQQatSgiFKewXgPXdj81xQqD-T5r3-MYwcmrRDsg-I-FORXtkUl0BE0WpZEQk67QGKmaI1b7OD4KCjQ997XjdI0lXPp5-X3CMhsMgxRSb-97gOngCls9Is/s1600/Gent+2.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="711" data-original-width="978" height="290" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEicfF-o_RuiwVaq7XaRfio22WQQatSgiFKewXgPXdj81xQqD-T5r3-MYwcmrRDsg-I-FORXtkUl0BE0WpZEQk67QGKmaI1b7OD4KCjQ997XjdI0lXPp5-X3CMhsMgxRSb-97gOngCls9Is/s400/Gent+2.png" width="400" /></a></div>
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A lot of place-based policies aim to encourage ‘mixed communities’ on the grounds of it being beneficial for existing low-income residents. While the evidence on whether mixed communities help is inconclusive, my findings suggest that such policies may end up displacing original residents altogether. If policymakers wish to improve outcomes for low-income private renters, it may be more effective to target housing assistance to households living in already gentrifying neighbourhoods.</div>
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<br />Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-31811156274623792692018-03-29T14:57:00.000+01:002018-03-29T14:57:27.250+01:00Housing: the happy self-delusion of ‘no shortage’Posted by Paul Cheshire<br />
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The assertion that there is no actual shortage of houses seems to be gaining, if not traction, then at least supporters. Ian Mulheirn, of the consultants Oxford Economics, <a href="https://medium.com/@ian.mulheirn?source=post_header_lockup">originated it</a>. <a href="https://www.spectator.co.uk/author/matthew-parris/">Matthew Parris</a> on 10 Feb in The Spectator took up the cause of no housing shortage. It is true house prices have more or less doubled in real terms in every decade since the 1950s and continued to rise well ahead of inflation until this year. We know the young are <a href="http://spatial-economics.blogspot.co.uk/2015/04/a-real-housing-crisis-but-only-fake.html">getting squeezed out of owning houses</a>. Similarly we know that the ONS measure of affordability shows houses are twice as unaffordable as in 1998 and are now less affordable relative to incomes than at the height of the 2007 boom. The measure may be imperfect but it is transparent - just the ratio of the median house price to median income.<br />
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The currency the ‘no shortage’ assertion has gained seems to be less the result of the persuasiveness of the evidence for it than the fact that it is a comforting narrative, appealing both to politicians and the CPRE/NIMBY brigade alike. It allows people to claim nothing uncomfortable (or effective) needs to be done about the crisis of housing affordability. It appeals to the NIMBY/CPRE brigade because the ‘solution’ doesn’t require us to build any more houses.<br />
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But the problem is that this claim of no ‘shortage of houses’ is based on no understanding of how housing markets work or even how one might usefully define a ‘shortage’. A shortage can only be usefully defined in terms of the balance of supply and demand. Basic economics is enough to give at least a hint that if prices are persistently rising in the long term, as house prices have, supply is less than demand. One of the additional paradoxes of our shortage, however, is that the constraints on supply imposed particularly by our planning system, cause <a href="http://www.spatialeconomics.ac.uk/SERC/publications/abstract.asp?index=3464" target="_blank">prices to be more volatile too</a>. So when demand does fall, all the adjustment is via price.<br />
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The evidence cited in support of the ‘no shortage’ assertion is that there were more houses per household in 2016 than there were in 1971. True: but there were more doctors per person in 2015 than in 1971 too. Far more. According to the World Bank the number of doctors per thousand people increased from <a href="https://data.worldbank.org/indicator/SH.MED.PHYS.ZS?locations=GB" target="_blank">1 in 1971 to 2.8 2015</a>. By comparison houses to households hardly increased at all: from 1 to 1.02 (England).<br />
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No one is asserting there is a surplus of doctors. As people get richer they demand more health care; that also happens as they get older. The ability of doctors to treat illness has greatly improved. It takes more doctors to treat cancer patients now than in 1971, partly because treatment can do so much more. The rising ratio of doctors to people reflects rising prosperity, the aging population and technical progress complementary to the demand for doctors. Much the same is true of houses. One of the inconvenient facts about the demand for houses is not just that as people get richer they <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1468-0084.00104" target="_blank">demand more housing space</a> but they do as they get older. Even after adjusting for income, education and other relevant factors, older people <a href="https://www.sciencedirect.com/science/article/pii/S1051137714000321" target="_blank">demand more housing space</a>. As car ownership has grown people demand more space around their houses.<br />
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Not only do people buy bigger houses as they get richer, a few buy second houses. A second home is no more ‘needed’ than is a private pension or a new outfit. But incomes are not equally distributed and that is how markets work. Also, of course, since the real price of houses has risen so rapidly over the past two generations (and since 2007, other assets have performed so badly) houses are, increasingly, pensions; not just shelter. They may be bought to let using equity accumulated by older owner occupiers or just be a nest egg, even if vacant.<br />
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Houses are not barrels of Brent Crude – all the same. They all vary and one attribute on which they vary is space: both internal living space and space in gardens. Also location is a critical attribute of houses. As we have pointed out before houses in Barnsley – though buildable on brownfields – are not substitutes for houses in Oxford – where the high productivity and high paying jobs are.<br />
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As I and LSE colleagues recently showed, more restrictive local planning in fact increases the number of vacant houses as well as increasing <a href="http://spatial-economics.blogspot.co.uk/2018/03/empty-homes-longer-commutes-unintended.html" target="_blank">commuting distances for workers</a>. Because houses all vary, ‘house hunting’ involves search - for the best set of attributes you can afford, where you want to live. More restrictive local planning increases local house prices, <a href="http://personal.lse.ac.uk/hilber/hilber_wp/Hilber_Vermeulen_EJ_forthcoming.pdf" target="_blank">creating an incentive to keep them occupied</a>.<br />
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But tighter local planning also makes it more difficult to adapt the characteristics of the housing stock to what people want and where they want to live. The result is house hunting becomes less efficient, so more houses are empty. These two forces work against each other but when you carefully analyse the data over the past 30 years, it is clear that impaired search dominates. Local vacancies are 23 percent higher if local planning restrictiveness increases by one standard deviation. That is not all. Because it makes finding a suitable house locally more difficult it also increases the average distance people have to travel to work. The same increase in local restrictiveness causes a 6.1 percent rise in commuting distances.<br />
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If, in the 25 years to 2016, we had built in England at the rate we built in the 25 years to 1991, we would have built 2.2m more houses; that is we would have built 63 percent more houses than we did. New houses have also been smaller. The result is an aging stock of increasingly cramped housing. In 1967 62.1 percent of English houses were less than 50 years old: in 2015 that had shrunk to 38.8 percent: not much more than the proportion that were less than 25 years old in 1945 – despite almost no building during the 5 years of WWII. English houses are akin to Cuban cars: they are still in use but they are clapped out and polluting.<br />
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There are two other important points. The no housing shortage assertion tells us to look at figures for ‘net additions to the housing stock’ not at those for completions – houses actually built. Politicians increasingly do the same. For example, housing forecasts and targets in the latest London Plan <a href="https://www.london.gov.uk/what-we-do/planning/london-plan/new-london-plan/draft-new-london-plan/" target="_blank">are all in terms of ‘net additions’</a>. On the face of it this sounds plausible but there are good reasons why the number of new houses actually built gives a far more reliable and useful figure. We have comparable data for a very long time – at least since 1946. So one can track house building over the long term. You can count houses but ‘net additions’ include conversions and changes of use as well as taking account of demolitions.<br />
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In the old days we used to knock down unfit houses, so ‘net additions’ were less than completions. But as the price of houses has gone up and up, instead of knocking them down we spruce them up, often subdividing them into two smaller units. Thus one house becomes two. In other words the worse the shortage of housing, the higher will be net additions relative to actual building. So measuring changes in the shortage of houses by comparing the number of households and the stock of homes over time will definitionally tend to underestimate the ‘shortage’. There may be ‘homeunits’ but, reflecting the growing shortage, they are increasingly small and less fit for purpose.<br />
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A similar argument applies to the denominator in the chosen measure of ‘shortage’: households. The increasing unaffordability of housing has generated an increase in young people living with, or returning to, their parents. Young couples put off having a family and live in a parent’s front room. Household formation is itself a function of houses prices and as they go up in real terms, household formation rates fall. Again Ian Mulheirn’s measure definitionally underestimates the shortage.<br />
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There is certainly a housing shortage in the sense that we have not been building enough houses to satisfy demand for at least 25 years. That there are fractionally more homeunits per household is irrelevant: incomes have risen so therefore demand has too – substantially; population has aged so (paradoxically to some) demand for housing has increased; the stock of houses, reflecting the falling rate of building, is aging and decreasing in average size; and because of the shortage, the formation of new households has been choked off.<br />
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Sorry but the politicians cannot just sit back comfortably. There is a housing shortage and it is causing a crisis of housing affordability. The only way to resolve the problem is to do something radical and uncomfortable. Build more houses.Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-32841902129763327072018-03-20T09:17:00.000+00:002018-03-20T09:17:13.465+00:00Who benefits from neighbourhoods designated as conservation areas?<h4>
Homeowners and people nearby benefit, though the implications for society are less clear, writes Gabriel Ahlfeldt</h4>
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Opinions on conservation areas are split. Proponents would argue that conservation areas protect the visual appearance of historic neighbourhoods, by preventing owners from making changes that would be detrimental to character. Opponents would counter that this form of protection, in practice, means a severe restriction of property rights and, as a result, owners cannot adapt their homes to changing needs. For example, it is difficult to expand the living area after having children, e.g. by means of an attic extension, or to improve the energy efficiency by having new PVC windows. There is also a concern that such restrictions make the property less attractive to potential buyers, depreciating its market value. By the same logic, however, it can also be argued that the prospect of neighbourhood stability that comes with conservation area designation adds to the value of a location and increases the market value of properties located in the area.<br />
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Theoretically, there could be a trade-off between the desire to preserve cultural heritage for future generations and current homeowners’ interests. However, whether the policy makes properties more or less attractive to homeowners today is an empirical issue that cannot be answered based on theoretical considerations alone.<br />
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In a <a href="http://onlinelibrary.wiley.com/doi/10.1111/ecoj.12454/abstract" target="_blank">recent article</a>, we analyse the causes and consequences of conservation area designation. To structure the problem and ensure that the empirical analysis is as transparent as possible, we develop a new formal political economy model whose predictions we then take to the data. The key idea is that residents with a taste for architectural distinctiveness stand to benefit from preservation, since it solves a coordination problem. The problem arises where individual homeowners make undesirable alterations to their properties or fail to keep them well-maintained. While removing a troublesome tree here or installing double-glazing windows there may make sense for an individual homeowner, such changes quickly destroy the character of the neighbourhood if everyone makes them. Therefore, if local homeowners like the character of their neighbourhood, it is worthwhile imposing strict regulation and maintenance obligations in the form of a conservation areas.<br />
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Our model predicts that if homeowners are able to game the system, then neighbourhoods will be more likely to be designated in areas where residents have a greater preference for architectural amenities. Moreover, in terms of timing, designation is likely to happen in gentrifying neighbourhoods because the inflow of wealthy heritage-affine residents will make it more likely that the perceived benefits of designation exceed the costs of restricted property rights.<br />
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Because conservation areas are designated as soon as they become worthwhile from the perspective of local owners (i.e. when the benefits have risen to equal the costs), the model predicts that no effect on prices of properties inside a conservation area will be associated with the incidence of a designation. However, there could be a positive price response outside the designated conservation area. This is because homeowners just outside a conservation area enjoy the benefits when passing through or looking at a protected area, without facing the cost of property rights restrictions.<br />
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The empirical results are in line with the predictions from our theoretical model. We find that an increase in the number of affluent residents, and residents who hold a university degree, significantly increases the chances of an area being given conservation status. Concretely, a 1 per cent increase in the degree share is associated with an 11 per cent increase in the designated land share – a strong effect.<br />
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Using more than a million property transactions from Nationwide Building society, we also find that the designation of conservation status has no immediate effect on properties prices inside conservation areas, but there is sometimes a positive price effect just outside.<br />
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In analysing price effects, we control for various property characteristics (size, number of bathrooms, type of heating system, etc.) and compare the price trend inside to-be-designated conservation areas to other areas with similar characteristics that do not experience a change in designation status (a control group). Figure 1 demonstrates that there is no significant discontinuity in the price trend at the time of designation (year zero). If anything, there is an increased price growth over time.<br />
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<b><span style="color: black; font-family: "arial" , "sans-serif"; font-size: 10.0pt;">Figure 1: Relative prices in to-be-designated conservation areas</span></b><span style="color: black; font-family: "arial" , "sans-serif"; font-size: 10.0pt;"><o:p></o:p></span></div>
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<i>Notes: Figure shows the difference in ln prices adjusted for property attributes between areas to be designated (in year zero) and matched areas that do not experience a change in designation status. Dots denote differences by year, solid black lines are the linear predictions from a difference-in-difference regression model allowing for an impact of the policy on levels in trends, and dashed black lines are the 95% confidence intervals.</i></div>
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Do these results support conservation area policies? Our findings suggest that the regulation helps homeowners solve a collective action problem, preventing some owners or landlords to freeride on others who invest in the historic housing stock. This means that the policy generally works in favour and not against the interests of local homeowners. It is not that current homeowners pay the price for preserving some heritage for future generations.</div>
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Yet, the implications for society as a whole are less clear. There are benefits, e.g. to commuters or tourists living in other areas, and costs, e.g. due to limited supply of new housing and affordability problems for first-time buyers, to residents living outside conservation. Our results suggest that the system essentially delegates the decision of whether or not to designate a neighbourhood as a conservation area to local homeowners. While this is good for homeowners in the area, the downside is that the costs and benefits to residents living outside such areas are ignored.</div>
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This blog post is based on the author’s paper Game of Zones: The Political Economy of Conservation Areas, co-authored with Kristoffer Moeller, Sevrin Waights and Nicolai Wendland, The Economic Journal, October 2017.</div>
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Blog reposted from <a href="http://blogs.lse.ac.uk/businessreview/category/authors/gabriel-ahlfeldt" target="_blank">LSE Business Review</a> </div>
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-10134667287484933672018-03-12T10:24:00.000+00:002018-03-12T10:25:47.051+00:00Empty homes, longer commutes: the unintended consequences of more restrictive local planning<h4>
Posted by Paul Cheshire, Christian Hilber, and Hans Koster</h4>
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We have argued for a very long time that the fundamental problem with housing in Britain is a lack of supply: we have been underbuilding for two generations. Updating the <a href="http://cep.lse.ac.uk/pubs/download/cp421.pdf">simple estimate one of us made in 2014</a>, the shortfall in building in England just since 1994 has gone up from about 2m homes to 2.5m. And we go on building the wrong sort of houses in the wrong places. We built more than twice as many per person in low-demand areas like Doncaster and Barnsley over the past 15 years than in Oxford and Cambridge.<br />
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In the pursuit of 'urban density' and 'building on Brownfields' we build too many cramped flats and maisonettes in less attractive cities or city neighbourhoods but almost no family friendly homes with gardens within reach of high paying jobs. We are spending £18bn on CrossRail but once it gets over the Green Belt boundary can build no houses. There is a price to pay for <a href="https://www.economist.com/blogs/blighty/2013/05/planning-and-housing">building on Brownfields</a> and not allocating enough land: a crisis of affordability and a <a href="http://cep.lse.ac.uk/pubs/download/EA033.pdf">hugely inequitable transfe</a>r of housing assets to the <a href="https://spatial-economics.blogspot.co.uk/2016/10/a-housing-failure-its-not-more-rental.html">rich and the old</a>. Our housing crisis is a long-term crisis of supply: an endemic lack of supply interacting with rising demand.<br />
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One of the many arguments used for allocating less land for housing is 'all those vacant homes'. Even one of the least restrictive English Regions, the East Midlands, argued in their Regional Spatial Strategy that they could allocate less land because they assumed they would reduce housing vacancies by 0.5 percentage points (<a href="http://www.emcouncils.gov.uk/write/AMR-Feb-07.pdf">that is by about 12.5% of the long term average</a>). Islington Council moved to use the planning system to tackle <a href="https://www.theguardian.com/society/2014/mar/31/london-council-plans-fine-housing-developers-buy-leave-investors">the 'scandal of empty homes' in 2014</a>.<br />
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A logically equivalent assertion was made by Lord Rogers, the long standing advocate of urban density, in arguing against allowing offices to be converted to housing to help with London's housing supply: '…why should we rush to convert office blocks when we already have <a href="https://www.standard.co.uk/comment/comment/richard-rogers-we-need-a-new-plan-to-build-an-even-greater-city-8499562.html">three-quarters of a million homes in England lying empty…</a>?.<br />
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The trouble with interventions in the housing market is that however well-intentioned, they often generate all sorts of unintended consequences. Markets respond by generating new and sometimes perverse incentives. Reflecting this, one of <a href="https://doi.org/10.1016/j.jpubeco.2017.12.006">our most recent research</a> findings, just published in the Journal of Public Economics, is that more restrictive local planning actually has the net effect of increasing the proportion of vacant homes.<br />
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Having fewer empty houses is in itself a good thing. We have a shortage of houses and using the stock more intensively is a way of increasing efficiency. That is just how cut price airlines operate: they keep their seats full and their aircraft in the air. But they do not just assume planes will spend more of their lives in the air and seats will be fuller. They have an analysis of how to achieve this.
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Unless we understand why houses are vacant, we cannot rationally hope to reduce the numbers that are empty just by being more restrictive. It would come as no surprise to economists to observe that in well-functioning labour markets there was unemployment. Workers search for jobs and employers seek (better) qualified workers. Attempting to regulate unemployment away makes no sense. Vacant houses are equivalent to unemployed workers so it makes no more sense to try to 'regulate' vacancies away. That does not, of course, mean that we should not have policies to try to minimise their number (what those policies should be is material for another blog).<br />
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What really happens if, by tightening planning restrictiveness (saying no to more development proposals) a Local Authority makes housing even scarcer? Well on the one hand it will make <a href="http://onlinelibrary.wiley.com/doi/10.1111/ecoj.12213/abstract">housing in its area more expensive</a>. This will increase the incentive to occupy housing, so reduce vacancies.
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Unfortunately more restrictive planning also makes it harder to modify homes or build new ones in different places or with different features to adapt the characteristics of the housing stock to the constantly changing patterns of demand. Jobs grow in a locality, so demand for houses there increases; the local school gets better so the demand for family sized homes increases; people buy a car, so want parking, a garage; they have fewer children or separate, so they want smaller homes - the list is potentially endless. The result of this is that in more restrictive locations people wanting a home find it more difficult to match their preferences to what is available. So they have to search longer or further afield. The result of that is there are more empty houses in the more tightly regulated places and more people living and commuting from the less regulated places further afield. Both this 'mismatch' and the price effects work at the same time but in opposite directions. So which dominates is an empirical question.<br />
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In our paper we go to great lengths to deal with problems of reverse causation and endogeneity. We have 30 years of data for 350 English Local Authorities and our results show with substantial reliability that the net effect of more local restrictiveness is not just to increase the proportion of empty homes but to increase it substantially. A one standard deviation increase in local restrictiveness causes the local vacancy rate to increase by nearly a quarter. That is not all. Because it makes finding a suitable house locally more difficult, it also increases the average distance people have to travel to work. The same increase in local restrictiveness causes a 6.1 percent rise in commuting distances.<br />
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So attempting to regulate housing vacancies away by allocating less land or being more restrictive with respect to new building or adaptation of existing structures, in fact increases the proportion of local homes that are empty as well making people who work in the area commute further. The absolute opposite of what the advocates of the policy want to achieve.<br />
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It is the mismatch between the preferences of households and the housing stock on offer that leads, other things equal, to higher vacancy rates in the more regulated - typically more desirable - places. Such constraints will likely cause a significant welfare loss. This is because too much housing stays empty in the most regulated, most desirable and, by implication, most productive places with the strongest demand and highest valuations for living space. So people are induced to commute further, while living in the "wrong" places.<br />
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The policy lesson would seem to be that planners should not allocate less land for development on the grounds that there are empty houses; nor should they make it more difficult to build or adapt houses. Rather they should encourage more flexibility with the number, location and type of houses.<br />
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There is moreover a nice irony for advocates of the 'compact city'. The most common policy to attempt to implement this ideal is to impose growth boundaries, making land scarcer, and implemented via Green Belts in Britain. Such policies also imply more restrictiveness with respect to adaptations of the existing stock or new construction in the areas in the Green Belts or beyond the containment boundary. Aiming for a compact city, in other words, makes planning policy more restrictive. Our results show this will have exactly the opposite to the intended effect because average commuting distances will lengthen as residents search further afield for housing they can afford and more closely matches their preferences.<br />
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[This post first appeared<a href="http://cep.lse.ac.uk/centrepiece/abstract.asp?index=5784"> in CEP's CentrePiece</a>, Spring 2018]
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-974562301377041914.post-82018285209289493942017-10-19T12:19:00.000+01:002017-10-19T12:21:06.422+01:00Distributive Politics Inside the City?<div dir="ltr" style="text-align: left;" trbidi="on">
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<![endif]--><a href="https://www.blogger.com/blogger.g?blogID=974562301377041914" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"></a><a href="https://www.blogger.com/blogger.g?blogID=974562301377041914" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"></a><a href="https://www.blogger.com/blogger.g?blogID=974562301377041914" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"></a><span style="font-size: 12.0pt; line-height: 115%;">Do local politicians target their voters when making policy decisions?
In other words, <b style="mso-bidi-font-weight: normal;">did your mayor build
that park next door to please her voters?</b> This question has been discussed
by economists and political scientists for decades, and belongs to a field of
enquiry we call <i style="mso-bidi-font-style: normal;">distributive politics</i>.
Answering this question is as important as understanding the effects of the
policies themselves. Why? Because policies and public investment decisions are
not created in a vacuum. To state the (painfully) obvious, politicians have
motivations of their own – like everyone else – and it is sometimes these
motivations, and not some loosely defined “greater good”, that determine
policy. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-size: 12.0pt; line-height: 115%;">Together with <a href="http://lucarepetto.com/">Luca Repetto</a>,
we have recently revisited this issue by taking a new approach and looking at
the allocation of investments <i style="mso-bidi-font-style: normal;">inside</i>
cities. Our question is straightforward: <b style="mso-bidi-font-weight: normal;">do
Spanish mayors target their voters with local investment? </b><span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-size: 12.0pt; line-height: 115%;">Understanding the determinants of national policies and
national investment allocations is of course important. Hence, it is not
surprising that most studies in the academic literature have focused on
national level allocations and their determinants. But<b style="mso-bidi-font-weight: normal;"> roughly half of public investment is carried out by local governments
(</b></span><a href="http://www.oecd.org/publications/investing-together-9789264197022-en.htm"><span style="font-size: 12.0pt; line-height: 115%;">OECD</span></a><b style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; line-height: 115%;">) and we know little
about how electoral factors shape those allocations. </span></b><span style="font-size: 12.0pt; line-height: 115%;">Moreover, the spatial extent and the
policy levers of local governments are different from those of their national
counterparts. So, government behaviour could be different too! In our </span><a href="http://felipecarozzi.com/Felipe_Carozzi_files/DistributivePoliticsCity.pdf"><span style="font-size: 12.0pt; line-height: 115%;">paper</span></a><span style="font-size: 12.0pt; line-height: 115%;">, we try to find out whether this is
the case. <span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-size: 12.0pt; line-height: 115%;">The main challenge when taking this question to the local
level arises from a data problem. Transfers to and between local authorities
are recorded in national and regional budgets, but allocations within those
authorities are usually not easily accessible for research. In our paper, we overcome
this problem by exploiting data from Plan E, a large stimulus program applied
by Zapatero’s socialist government in Spain between late 2008 and 2011. This
program transferred roughly 13 billion euros to Spanish municipalities in an
attempt to kick-start the economy. Local governments had essentially full
discretion to allocate investment projects within their boundaries and jumped
on the resources immediately. Over 57,000 municipal investment projects where
carried out under Plan E. These where usually parks, plazas, and basic service
infrastructure, all of which are likely to have spatially localized benefits.
And here comes the special treat. As an unusual present for future researchers,
the national government required municipalities to geo-locate all projects. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-size: 12.0pt; line-height: 115%;">By combining data on these projects with polling station data
for Spanish municipal and national elections, <b style="mso-bidi-font-weight: normal;">we are able to study whether Spanish mayors allocate more Plan E
spending to areas of strong electoral support</b>. An illustration of the data
we use in the project can be seen in <b style="mso-bidi-font-weight: normal;">Figure
1</b>.</span></div>
<div align="center" class="MsoNormal" style="text-align: center;">
</div>
<div align="center" class="MsoNormal" style="text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; line-height: 115%;">Figure 1</span></b></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwOuN-6y1KSUmpnk28EbZMxXAjj2-W-FpcNRHkxf6Lrfh5-L_eGTiQyXK5bgy3RWFQ1OmAOhDpmOTNop1Sm1XdHzsrnTsxoPcdVXEdjHGlgUYLNfSBNd6Vfh8JidilluyKCN_ZHET90lT6/s1600/madrid_serc.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="360" data-original-width="387" height="370" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwOuN-6y1KSUmpnk28EbZMxXAjj2-W-FpcNRHkxf6Lrfh5-L_eGTiQyXK5bgy3RWFQ1OmAOhDpmOTNop1Sm1XdHzsrnTsxoPcdVXEdjHGlgUYLNfSBNd6Vfh8JidilluyKCN_ZHET90lT6/s400/madrid_serc.png" width="400" /></a></div>
<br /></div>
<div class="MsoNormal">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: "linlibertineti"; font-size: 10.0pt; line-height: 115%;">Notes</span></b><span style="font-family: "linlibertineti"; font-size: 10.0pt; line-height: 115%;">: </span><span style="font-family: "linlibertinet"; font-size: 10.0pt; line-height: 115%;">Points correspond to </span><span style="font-family: "linlibertineti"; font-size: 10.0pt; line-height: 115%;">Plan
E </span><span style="font-family: "linlibertinet"; font-size: 10.0pt; line-height: 115%;">projects located in the municipality of
Madrid. Census areas are coloured in red if the socialist party </span><span style="font-family: "linlibertineti"; font-size: 10.0pt; line-height: 115%;">PSOE </span><span style="font-family: "linlibertinet"; font-size: 10.0pt; line-height: 115%;">received the
majority of votes in the 2007municipal election, with the intensity of the
shade varying with the vote share. Similarly, blue areas correspond to areas
where the right-wing </span><span style="font-family: "linlibertineti"; font-size: 10.0pt; line-height: 115%;">PP </span><span style="font-family: "linlibertinet"; font-size: 10.0pt; line-height: 115%;">obtained the majority of votes.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; line-height: 115%;">No Distributive Politics Inside the
City? Our Analysis</span></b></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-size: 12.0pt; line-height: 115%;">Comparing allocations in cities ruled by different parties is
tricky, because our cities are likely to be different in many dimensions. To deal
with these confounding factors, we implement a close election regression
discontinuity design. We compare municipalities where the socialist party (PSOE)
barely won the mayoralty with municipalities where it barely lost. We then look
at whether areas within these municipalities where PSOE had strong electoral
support receive more resources under a socialist mayor. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<div class="separator" style="clear: both; text-align: center;">
</div>
<span style="font-size: 12.0pt; line-height: 115%;">The main results are illustrated in <b style="mso-bidi-font-weight: normal;">Figure 2</b>. The horizontal axis represents the vote share distance to
a PSOE majority. The vertical axis represents one of our measures of PSOE
partisan alignment in the allocation of Plan E projects. You can think of it as
the city level covariance between PSOE support and the amount of spending. The
graph indicates that there is no difference in this measure on either side of
the discontinuity. We interpret this as evidence that there is no partisan bias
in the allocation of resources to Spanish municipalities. <b style="mso-bidi-font-weight: normal;">Whichever use mayors do of this money, they do not use it to invest in
neighbourhoods where their voters live.</b></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br />
<br /></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; line-height: 115%;">Figure 2</span></b></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhn4tqioiufZeiB9iGX_H9Zps_YZIYiCgD432lUblfK53G9SDTixTRSLttvhWTSl3JmYZAuE2XMwIp7WPrtXImfprnlaa7pzogQZ2OON4vBJMi52ugXcLJWebd2QSbMAiQ9c3TzGDFeTh_H/s1600/RDD.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="334" data-original-width="463" height="287" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhn4tqioiufZeiB9iGX_H9Zps_YZIYiCgD432lUblfK53G9SDTixTRSLttvhWTSl3JmYZAuE2XMwIp7WPrtXImfprnlaa7pzogQZ2OON4vBJMi52ugXcLJWebd2QSbMAiQ9c3TzGDFeTh_H/s400/RDD.png" width="400" /></a></div>
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: "linlibertineti"; font-size: 10.0pt;">Note:</span></b><span style="font-family: "linlibertineti"; font-size: 10.0pt;"> </span><span style="font-family: "linlibertinet"; font-size: 10.0pt;">The vertical axis
shows different measures of bias in the allocation of </span><span style="font-family: "linlibertineti"; font-size: 10.0pt;">Plan
E </span><span style="font-family: "linlibertinet"; font-size: 10.0pt;">projects towards </span><span style="font-family: "linlibertineti"; font-size: 10.0pt;">PSOE </span><span style="font-family: "linlibertinet"; font-size: 10.0pt;">voters.
The horizontal axis shows the </span><span style="font-family: "linlibertineti"; font-size: 10.0pt;">PSOE </span><span style="font-family: "linlibertinet"; font-size: 10.0pt;">winning
margin, defined as the vote share distance to a seat majority change. Dots are
averages in 1% bins of the winning margin. The lines are local linear
regression estimates.</span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-size: 12.0pt; line-height: 115%;">It is tempting to extrapolate from this result and conclude
that distributive politics do not play an important role within cities. Perhaps
investments benefit a broader group of voters, as people moving beyond their
residence and its surroundings enjoy the benefits of municipal investments
throughout the city. Or maybe local politicians lack the sophistication of
their national counterparts.<a href="https://www.blogger.com/blogger.g?blogID=974562301377041914#_ftn1" name="_ftnref1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: "calibri" , "sans-serif"; font-size: 12.0pt; line-height: 115%;">[1]</span></span></span></span></a>
But we must be cautious. The targeting of supporters is not the only prediction
in theories of distributive politics. There is a decades-long debate between
political scientists on whether politicians target their supporters or, rather,
target swing voters; voters who are likely to switch sides if policy is
favourable to them. If the latter theory were correct, then distributive
politics could still play an important role, albeit one that is invisible to us.
To be sure, we will need more research in this area.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-size: 12.0pt; line-height: 115%;">Despite these caveats, we continue to think our findings are
good news. While there seems to be a good deal of partisan bias in allocation
of national resources to cities, our results show this phenomenon appears to be
absent within these cities. The optimism of the will may lead us to think that
politicians could be targeting citizen based on their needs and not on their
party affiliation. And <b style="mso-bidi-font-weight: normal;">perhaps that is
good</b>. Alternatively, the pessimism of the intellect may us to think that the
game is being played in some other margin. We can’t say for sure, but we’ll try
to revisit this issue in the future. I’ll keep you posted. </span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; line-height: 115%;">References: </span></b></div>
<div class="MsoNormal">
<span class="docbaseauthor">Carozzi, Felipe and Luca Repetto, </span><span class="docbasetitle">"Distributive Politics inside the City? The Political
Economy of Spain's Plan E", <i>CESifo Working Paper No. 6628</i>, August
2017 (newest version)</span></div>
<div class="MsoNormal">
<span class="personname">Carozzi, Felipe</span> and <span class="personname">Repetto, Luca</span> , “<i><span style="font-family: "calibri" , "sans-serif"; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-theme-font: minor-bidi; mso-hansi-theme-font: minor-latin;">Distributive politics inside
the city? The political economy of Spain's Plan E”.</span></i> SERC Discussion
Papers, SERCDP0212. Spatial Economics Research Centre, London School of
Economics and Political Science, London, UK. February 2017</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div style="mso-element: footnote-list;">
<br clear="all" />
<hr align="left" size="1" width="33%" />
<div id="ftn1" style="mso-element: footnote;">
<div class="MsoFootnoteText">
<a href="https://www.blogger.com/blogger.g?blogID=974562301377041914#_ftnref1" name="_ftn1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: "calibri" , "sans-serif"; font-size: 10.0pt; line-height: 115%;">[1]</span></span></span></span></a> <span lang="EN-US" style="mso-ansi-language: EN-US;">We discuss these and other
possibilities in the last version of our working paper. In general, evidence
for these alternative mechanisms is not very convincing.</span></div>
</div>
</div>
</div>
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