The welfare effects of character protections on neighbourhoods

Ryan Greenaway-McGrevy and James Allan Jones

No 14, Working Papers from University of Auckland, Economic Policy Center (EPC)

Abstract: We extend the monocentric model to examine the effects of character protections on household welfare. Protections indirectly generate amenity values for residents but require floor area ratio (FAR) restrictions on housing development, presenting a trade-off between welfare-increasing amenities and welfare-decreasing floorspace constraints. Welfare effects become negative when the associated FAR restrictions of character protections are sufficiently tight. This is more likely when protections apply to neighbourhoods that have high demand due to proximity to non-character amenities or employment locations. Calibrating the model to Auckland, we find negative welfare effects, equivalent to a reduction in representative household income of $391 to $1,375 per year.

Keywords: Character Protections; Land Use Regulations; Redevelopment; House Prices (search for similar items in EconPapers)
JEL-codes: R14 R31 R52 (search for similar items in EconPapers)
Date: 2024-12
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Persistent link: https://EconPapers.repec.org/RePEc:cyc:wpaper:014

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