The Cost and Benefit of Relaxing Floor Area Ratio Requirements in Urban Centers - Including the Impact of Congestion Charges via ITS (Japanese)

Tatsuo Hatta, Yoshiaki Kume and Koji Karato

Discussion Papers (Japanese) from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: Office-based businesses located in central business districts (CBD), which are a foundation of urban production, are subject to agglomeration economies. Thus, the promotion of office concentration in CBD's will result in higher productivity. At the same time, however, the concentration of office buildings in CBD's will lead to traffic congestion. As a means to control over such congestion, floor area ratio requirements are being implemented in CBD's. But these regulations have the side effect of reducing agglomeration in CBD's and reducing productivity. There are two possible ways of curbing congestion while minimizing productivity loss. One method is to raise the maximum floor area ratio for residential buildings in CBD's, thereby promoting the development of urban dwellings and reducing the crowding on commuter trains; the second method is to alleviate road congestion by introducing a road pricing scheme utilizing an intelligent transportation system (ITS). The present paper estimates the effect of simultaneously implementing these two measures.

Pages: 41 pages
Date: 2005-03
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Persistent link: https://EconPapers.repec.org/RePEc:eti:rdpsjp:05016

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