Understanding industrial land supply: how Dutch municipalities make decisions about supplying serviced building land

Huub Ploegmakers, Erwin van der Krabben and Edwin Buitelaar

Journal of Property Research, 2013, vol. 30, issue 4, 324-344

Abstract: The supply side of real estate markets has remained relatively neglected compared to the body of work that studies the demand side. Consequently, little is known about the way that suppliers actually make decisions about the quantity of land and property to be made available for sale at any one time. This paper investigates how one particular type of suppliers, public developers of serviced industrial building land in the Netherlands, assess market conditions, and the way these analyses influence decisions to make more serviced building land available. This paper presents evidence from interviews amongst municipal developers and finds that profit considerations are not the main motive behind their decisions to develop industrial land. Municipalities are involved in land development primarily because they want to be able to steer local economic development. Furthermore, they also pay attention to 'nonprice' signals of market conditions -- sales levels in particular -- when deciding to make more land available for sale. However, we should be cautious with interpreting these results since this study only addresses public agencies, which might operate with 'soft budget constraints' and might have alternative preference functions than commercial developers.

Date: 2013
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:taf:jpropr:v:30:y:2013:i:4:p:324-344

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DOI: 10.1080/09599916.2012.753933

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