The Planning Process And The Elasticity of Housing Supply: A Theoretical Study of the Effects a ShorterPlanning Process Will Have onThe Supply of New Dwellings in Stockholm
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
This thesis will investigate the potential that a reduction of the duration of
the municipality planning process will increase the production level of new dwellings in the Stockholm region. The planning processes are significantly longer in Sweden than in comparable countries, which could leave potential for a quite dramatic cut.
The planning process will be quantified with a net present value approach which will help the thesis overcome some of the problems previous research have had in having reliable estimations of the costs a firm faces in the initial stages of a real estate project. The thesis finds that the more elastic the land market supply is the larger will the rightward shift be of the housing market supply function. However, this paper challenges some previous research that determines the elasticity of housing supply to be elastic, due to the events in the early 90´s it is likely that there have been systematic changes in the housing market characteristics, however further research is needed in this area of studies.
The thesis finding are in line with previous research that if the elasticity of supply is smaller than infinity and the positive supply shock does not affect the demand side of the market, a rational market response would be to increase the quantity supply.
Place, publisher, year, edition, pages
2014. , 67 p.
Housing Supply, planning processes by the municipality, land use restrictions
Economics and Business
IdentifiersURN: urn:nbn:se:kth:diva-158059OAI: oai:DiVA.org:kth-158059DiVA: diva2:774082