Commercial Revitalization in Low-Income Urban Communities: General Tax Incentives vs. Direct Incentives to Developers

Li Zhou ()

No 2012-4, Working Papers from University of Alberta, Department of Economics

Abstract: This paper proposes a commercial development model, based on Fujita's (1988) monopolistic competition model of spatial agglomeration, to examine stores' decisions to enter urban communities. The model focuses on commercial developers and large stores, and identifies a potential holdup problem in the commercial development market arising because developers incur costs before negotiating with anchor tenants over pro fit sharing; the holdup problem is more likely to occur in low-income communities where the profitability of commercial projects is small. The model predicts that direct incentives to developers are preferred to general tax incentives for addressing this market failure.

Keywords: urban redevelopment programs; economic agglomeration; holdup problem (search for similar items in EconPapers)
JEL-codes: H50 H76 R58 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2012-01-01
New Economics Papers: this item is included in nep-geo, nep-pbe, nep-ppm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://sites.ualberta.ca/~econwps/2012/wp2012-04.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:albaec:2012_004

Access Statistics for this paper

More papers in Working Papers from University of Alberta, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Joseph Marchand ().