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Measuring the Stringency of Land Use Regulation: The Case of China's Building Height Limits

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Abstract
This paper develops a new approach for measuring the stringency of a major form of land use regulation, building height restrictions, and applies it to an extraordinary data set of land-lease transactions from China. Our theory shows that the elasticity of land price with respect to the floor area ratio (FAR), a building height indicator, is a measure of the regulation's stringency (the extent to which FAR is kept below the free-market level). Using a national sample, estimation allowing this elasticity to be city-specific shows variation in the stringency of FAR regulation across Chinese cities. Single-city estimation for Beijing shows that stringency varies with site characteristics.

Suggested Citation

  • Shihe Fu, 2017. "Measuring the Stringency of Land Use Regulation: The Case of China's Building Height Limits," Working Papers 2017-10-16, Wang Yanan Institute for Studies in Economics (WISE), Xiamen University.
    • Handle: RePEc:wyi:wpaper:002361
    Note: Coauthored with Jan K. Brueckner (UC Irvine), Yizhen Gu (Institute for Economic and Social Research, Jinan University), and Junfu Zhang (Clark University). Working paper version can be downloaded from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2774669.
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    More about this item

    Keywords

    floor-area ratio; density restriction; urban development;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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