Economic rent, residual value and the economics of affordanle housing development
||Oxley, Michael; Golland, Andrew
||Economic rent, residual value and the economics of affordanle housing development
||11th European Real Estate Society Conference (2-5 June 2004) Milano, Italy
||The paper will present and discuss a model for appraising the economic viability of residential development in cases where ‘affordable housing’ is to be developed jointly with ‘market housing’. The model computes indicative residual development values and compares them with alternative use values for prospective development sites. The model has been derived as a result of viability analysis undertaken for the Greater London Authority. The background to this work, including the policy ambitions to achieve 50% affordable housing on development sites in London, will be explained and discussed. The relationships between residual values, property types and the subsidisation of affordable housing will be explored. The consequences of variations in such factors as house prices, densities and building costs will be examined. The relationships between the principles of the model and conventional economic rent theory will be considered with a view to discussing the origins and distribution of development surpluses. Applications of the model will be demonstrated with the aid of recent data based on indicative development scenarios in London. The benefits, limitations and possible extensions of the modelling approach will be debated.
||Economic viability; residential development; economic rent; residual values
Post discussion ...
||Residential Development and Planning
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