the economic, social, political and environmental impact of land use regulations in france by...
TRANSCRIPT
The economic, social, political and environmental impact of land use regulations in FRANCE
By Vincent BENARD Institut Hayek
www.fahayek.org [email protected]
Housing, public crisis, private care
(Nov. 2007)
French Median multiple (Gross revenue)(Figures are a bit higher using net disposable income)
Index of home prices relative to households’ net disposable income – Index 1 : 1965 // 2008 peak: 1,66 to 1,9 -
# of new homes / year
Supply reacted with a 6 year lag to demand
Demand begins to soar
Construction costs didn’t increase as fast as home prices…
Real estate prices, 1998-2007 gross inflation
Construction costs : +30 % Home prices : +140% Serviced developable land : +500% (w/ high regional
variability) Coastal zones : X 10 and more
Cost of land servicing : 15-20€ per square meter of land Cost of serviced land in a typical rural town, 20km from Nantes'
Fringe: 1997 : 15-20€ (so most rural developments had to be
subsidized) 2007 : 120-180€
30 km from Montpellier : 1997 : 30€ - 2007 : up to 300€
When small lots are nearly as expensive as bigger ones… The regulatory penalty is high
Small lot
Bigger lot
price*
Regulatory penalty
*Costs of land servicing deduced
surface
Not only in Paris
In red, fastest growing areas Rennes (521 000) Nantes (804 000) La Rochelle (140 000) Toulouse (1 100 000) Montpellier (530 000) Vannes (130 000) Poitiers (204 000) (...)
Consequences of tough land use regulations Housing unaffordability Wealth transfer from middle class to richer people « urban sprawl » containment leads to « rural sprawl » and
« rural mess » Ugly urban landscapes out of historical areas Environmental benefits : not so evident Corruption of political life expensive and powerful bureaucracy
1999 to 2006 : rural small cities grew much fasterThe example of Nantes
Land use corruption, a « serious concern »
For the first time, in 2006, official documents point out « land regulation corruption» as a major concern
The phenomenon is impossible to quantify precisely.
Some lawyers depict it as « endemic » in some regions
Other Environmental effects
Ugly urban landscape, because of big social housing programs
<== This one is not the ugliest...
Natural zones damaged Arsons... When nicely wooded
lands are in the process of being classified as « forever undevelopable », these lands are exposed to wildfires... Just a coincidence, of course !
New smart growth utopias ?
Two examples of « ideal
cities » as smart growth
and environmentalists
see them...
Would you call these...
« sustainable » ?
CONCLUSION
Knowing all we now know about the effects of zoning regulations, we should take the opportunity of currently falling prices to scrap down all these regulations ....
We should enact land regulations that let owners decide what to do with their land
Because of falling prices, it's politically easier to do it now
But, alas, it's very unlikely to happen
Thank you !
For french savvy people : Institut Hayek : www.fahayek.org My blog, « objectif liberté » : www.objectifliberte.fr
My e-mail : [email protected]
Images from : CGPC, INSEE, CODELA, COURLY, Etudes Foncières.