IDEAS home Printed from https://ideas.repec.org/a/eme/ijhmap/ijhma-11-2019-0114.html
   My bibliography  Save this article

Staged implementation of inclusionary zoning as a mechanism to improve housing affordability in Auckland, New Zealand

Author

Listed:
  • Mario A. Fernandez
  • Shane L. Martin

Abstract

Purpose - The purpose of this paper is to analyse how the staged implementation of inclusionary zoning (IZ) performs relative to conventional IZ programmes in terms of increasing the number of low- and moderate-income households become homeowners. Design/methodology/approach - The paper applies a matching model implemented through a mixed-integer programme model taking Auckland (New Zealand) housing market as a case study. The IZ is simulated by two features: a target price (below which affordable houses are defined) and the income threshold (below which any household gains access to the programme). The staging of IZ consists of first directing affordable houses to low-income households, where those houses that are not sold are cascaded to subsequent population groups with higher incomes. Findings - The staged implementation of IZ does not necessarily imply that the number of sales will increase both for affordable and market-rate houses. However, a hybrid approach defined by two target prices results in a greater number of sales relative to a conventional IZ and a baseline affordable market while achieving market efficiency and equity. Research limitations/implications - The paper is limited to the marginal impact of new affordable houses entering the market. It does not address further market rounds for houses left empty for tractability purposes. Also, the analysis is circumscribed to current renters and not owners, if owners were included they would outbid renters and distort the intended impact of IZ as an affordable housing policy. Originality/value - The paper has relevance for policymakers because it provides evidence about the dimensions of IZ to have a lasting effect on housing affordability. The model is applied to a single housing market but is suitable to be generalized and adapted to a different urban environment.

Suggested Citation

  • Mario A. Fernandez & Shane L. Martin, 2020. "Staged implementation of inclusionary zoning as a mechanism to improve housing affordability in Auckland, New Zealand," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 13(4), pages 617-633, February.
    • Handle: RePEc:eme:ijhmap:ijhma-11-2019-0114
    DOI: 10.1108/IJHMA-11-2019-0114
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/IJHMA-11-2019-0114/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/IJHMA-11-2019-0114/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/IJHMA-11-2019-0114?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mario A. Fernandez & Gonzalo E. Sánchez & Santiago Bucaram, 2021. "Price effects of the special housing areas in Auckland," New Zealand Economic Papers, Taylor & Francis Journals, vol. 55(1), pages 141-154, January.
    2. Ng, Ka Fai & Lo, Hong K., 2015. "Optimal housing supply in a bid-rent equilibrium framework," Transportation Research Part B: Methodological, Elsevier, vol. 74(C), pages 62-78.
    3. Atila Abdulkadiroglu & Tayfun Sonmez, 1998. "Random Serial Dictatorship and the Core from Random Endowments in House Allocation Problems," Econometrica, Econometric Society, vol. 66(3), pages 689-702, May.
    4. Molloy, Raven, 2020. "The effect of housing supply regulation on housing affordability: A review," Regional Science and Urban Economics, Elsevier, vol. 80(C).
    5. Mario A. Fernandez, 2020. "A matching simulation to assess additional housing capacity in Auckland," New Zealand Economic Papers, Taylor & Francis Journals, vol. 54(1), pages 67-88, January.
    6. Michael Stone, 2006. "What is housing affordability? The case for the residual income approach," Housing Policy Debate, Taylor & Francis Journals, vol. 17(1), pages 151-184.
    7. Tilak Abeysinghe & Jiaying Gu, 2016. "Estimating fundamental and affordable housing price trends: a study based on Singapore," Applied Economics, Taylor & Francis Journals, vol. 48(49), pages 4783-4798, October.
    8. Diagne, Adji Fatou & Kurban, Haydar & Schmutz, Benoit, 2018. "Are inclusionary housing programs color-blind? The case of Montgomery County MPDU program," Journal of Housing Economics, Elsevier, vol. 40(C), pages 6-24.
    9. W. Hughen & Dustin Read, 2014. "Inclusionary Housing Policies, Stigma Effects and Strategic Production Decisions," The Journal of Real Estate Finance and Economics, Springer, vol. 48(4), pages 589-610, May.
    10. William Alonso, 1960. "A Theory Of The Urban Land Market," Papers in Regional Science, Wiley Blackwell, vol. 6(1), pages 149-157, January.
    11. Vinit Mukhija & Ashok Das & Lara Regus & Sara Slovin Tsay, 2015. "The Tradeoffs of Inclusionary Zoning: What Do We Know and What Do We Need to Know?," Planning Practice & Research, Taylor & Francis Journals, vol. 30(2), pages 222-235, April.
    12. Miyagawa, Eiichi, 2001. "House Allocation with Transfers," Journal of Economic Theory, Elsevier, vol. 100(2), pages 329-355, October.
    13. John M. Clapp, 1981. "The Impact of Inclusionary Zoning on the Location and Type of Construction Activity," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 9(4), pages 436-456, December.
    14. James Albrecht & Axel Anderson & Eric Smith & Susan Vroman, 2007. "Opportunistic Matching In The Housing Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(2), pages 641-664, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mario Andres Fernandez & Shane L. Martin, 2021. "Affordable housing policies in a post-COVID aftermath," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 15(1), pages 126-144, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mario Andres Fernandez & Shane L. Martin, 2021. "Affordable housing policies in a post-COVID aftermath," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 15(1), pages 126-144, April.
    2. Yuji Fujinaka & Takuma Wakayama, 2011. "Secure implementation in Shapley–Scarf housing markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 48(1), pages 147-169, September.
    3. Atila Abdulkadiroglu & Tayfun Sönmez, 2003. "School Choice: A Mechanism Design Approach," American Economic Review, American Economic Association, vol. 93(3), pages 729-747, June.
    4. Lars Ehlers & Bettina Klaus, 2007. "Consistent House Allocation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 30(3), pages 561-574, March.
    5. Rustamdjan Hakimov & Onur Kesten, 2018. "The Equitable Top Trading Cycles Mechanism For School Choice," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(4), pages 2219-2258, November.
    6. Juan Yan & Marietta Haffner & Marja Elsinga, 2021. "Inclusionary Housing: An Evaluation of a New Public Rental Housing Governance Instrument in China," Land, MDPI, vol. 10(3), pages 1-17, March.
    7. Miyagawa, Eiichi, 2002. "Strategy-Proofness and the Core in House Allocation Problems," Games and Economic Behavior, Elsevier, vol. 38(2), pages 347-361, February.
    8. Benedict Dellaert & Vladislav Golounov & Jaideep Prabhu, 2005. "The Impact of Price Disclosure on Dynamic Shopping Decisions," Marketing Letters, Springer, vol. 16(1), pages 37-52, January.
    9. Ehlers, Lars, 2014. "Top trading with fixed tie-breaking in markets with indivisible goods," Journal of Economic Theory, Elsevier, vol. 151(C), pages 64-87.
    10. Fujinaka, Yuji & Miyakawa, Toshiji, 2020. "Ex-post incentive compatible and individually rational assignments in housing markets with interdependent values," Journal of Mathematical Economics, Elsevier, vol. 91(C), pages 157-164.
    11. Sonmez, Tayfun & Utku Unver, M., 2005. "House allocation with existing tenants: an equivalence," Games and Economic Behavior, Elsevier, vol. 52(1), pages 153-185, July.
    12. Tiznado-Aitken, Ignacio & Lucas, Karen & Muñoz, Juan Carlos & Hurtubia, Ricardo, 2022. "Freedom of choice? Social and spatial disparities on combined housing and transport affordability," Transport Policy, Elsevier, vol. 122(C), pages 39-53.
    13. Richardson, Benjamin Felix, 2022. "Finance, food, and future urban zones: The failure of flexible development in Auckland, New Zealand," Land Use Policy, Elsevier, vol. 119(C).
    14. Essi Eerola & Niku Maattanen, 2018. "Borrowing constraints and housing market liquidity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 27, pages 184-204, January.
    15. Gautier, Pieter & van Vuuren, Aico & Siegmann, Arjen, 2007. "The Effect of the Theo van Gogh Murder on House Prices in Amsterdam," CEPR Discussion Papers 6175, C.E.P.R. Discussion Papers.
    16. Alvin E. Roth & Tayfun Sönmez & M. Utku Ünver, 2004. "Kidney Exchange," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(2), pages 457-488.
    17. Pengyu Zhu, 2013. "Telecommuting, Household Commute and Location Choice," Urban Studies, Urban Studies Journal Limited, vol. 50(12), pages 2441-2459, September.
    18. Han, Wenjing & Zhang, Xiaoling & Zheng, Xian, 2020. "Land use regulation and urban land value: Evidence from China," Land Use Policy, Elsevier, vol. 92(C).
    19. Zhiwei Cui & Yan-An Hwang, 2017. "House exchange and residential segregation in networks," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(1), pages 125-147, March.
    20. Mouratidis, Kostas & Ettema, Dick & Næss, Petter, 2019. "Urban form, travel behavior, and travel satisfaction," Transportation Research Part A: Policy and Practice, Elsevier, vol. 129(C), pages 306-320.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:ijhmap:ijhma-11-2019-0114. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.