Rent gap formation due to public infrastructure and planning policies
An analysis of Greater Santiago, Chile, 2008-2011
Bibliographic Data
| ID | 4139902 |
|---|---|
| Authors | Ernesto López-Morales (0000-0003-2878-7143, Universidad de Chile, Chile; Centre for Conflict and Social Cohesion Studies (COES), Chile, corresponding author), Cecilia Sanhueza (0009-0002-9478-9462, Universidad Mayor), Claudia Sanhueza (Universidad Mayor, Chile; Centre for Social Conflict and Cohesion Studies (COES), Chile), Sebastián Espinoza (0000-0002-8678-1201, University of Chile), Felipe Ordenes (University of Chile), Hernán Orozco (0000-0002-0681-5556, Universidad Tecnológica Metropolitana, Chile) |
| Year | 2019 |
| Volume | 51 |
| Issue | 7 |
| Pages | 1536-1557 |
| Publication date | 2019-10-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Environment and Planning A Economy and Space (JOURNAL) |
| Journal identifiers | ISSN: 0308-518X • E-ISSN: 1472-3409 |
| Publisher | SAGE Publications Inc (PUBLISHER) |
| DOI | 10.1177/0308518x19852639 |
| OpenAlex | W2946845343 |
| Language | EN |
| Citations received | 27 |
| References cited | 24 |
Land upzoning and state investment in public infrastructure are two of the principal factors that increase the rent gap in the city; however, the scale of their impact remains unknown. This paper presents a novel method of rent gap analysis based on multiple linear regressions with controlled fixed factors, tested for Greater Santiago, Chile. Drawing on an administrative dataset of 36,911 transactions for new apartments sold between 2008 and 2011, along with data regarding the size of each apartment and its commercial sale price-but discounting imputed land and construction costs-it can be seen that state investment in the Metro rapid transit network enlarged the potential ground rent (portion of the rent gap capitalized by developers) by 25.6% over the period. Similarly, each additional floor area ratio point (dictated by district zoning guidelines) increased capitalized ground rent by an average of 6.1%. Meanwhile, the portion capitalized by small-scale private landowners through sale of un-redeveloped land increased by only 5.5% over the same period. These results show the high elasticity of the rent gap, the strong influence of land regulations and state-financed Metro infrastructure on rent gap formation, and the need for discussion of taxation of the capitalized ground rent for redistributive purposes
Agricultural economics · Apartment · Business · Economic rent · Economics · Geography · Microeconomics · Public infrastructure · Subdivision · Zoning · Housing Market and Economics · Housing, Finance, and Neoliberalism · Urban and Rural Development Challenges · Finance
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| Unique citing works | 27 |
|---|---|
| Citations per year | 4,5 |
| Citation span | 2020 - 2026 (7) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 25 |