Journal Article

Reflections on the nature and policy implications of planning restrictions on housing supply. Discussion of ‘Planning policy, planning practice, and housing supply’ by Kate Barker

Paul Cheshire

in Oxford Review of Economic Policy

Published on behalf of The Oxford Review of Economic Policy Ltd

Volume 24, issue 1, pages 50-58
Published in print January 2008 | ISSN: 0266-903X
Published online January 2008 | e-ISSN: 1460-2121 | DOI: https://dx.doi.org/10.1093/oxrep/grn002
Reflections on the nature and policy implications of planning restrictions on housing supply. Discussion of ‘Planning policy, planning practice, and housing supply’ by Kate Barker

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Planning is about other things as well, but it is fundamentally an economic activity. It allocates a scarce resource but independently of prices or any market information. In analysing the effects this allocative mechanism has on housing supply (or, indeed, the supply of buildings for any given use), we need to think carefully about what exactly it is that planning allocates and whether, in its operation, it creates a constraint on the supply of what it is allocating. In the British case, our planning system does not operate on the supply of housing directly, but indirectly via the constraint imposed on land supply. Given the income elasticity of demand for space this has policy implications perhaps even more serious than is acknowledged by Barker.

Keywords: land use regulation; demand for space; housing demand; housing affordability; H31; Q24; R14; R21; R38

Journal Article.  4643 words.  Illustrated.

Subjects: Economic Development and Growth ; Public Economics ; Political Economy ; Public Policy

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