The effect of developable land supply on land price[Les effets prix de l’offre foncière]

Does land use zoning policy increases land prices by reducing developable land supply ? To answer this question, we propose an evaluation of the relationship between land supply and land prices in a French region. We propose a geomatic method to measure real developable land supply based on new generation of spatial land use micro-data (digitalized cadastral map, land and owner characteristics, land use zoning policies). To estimate the price effects of land supply, we use two alternative econometric evaluation methods: spatial hedonic model and quasi-natural experiments. We show that with both methodologies the estimated relationship is positive. Municipalities with higher corrected developable land supply exhibit higher land prices. The disequilibrium between supply and demand for developable land is so high in Provence-Alpes-Côte d'Azur that municipalities who increase the supply of land through new developable zones (without coordination with neighboring municipalities) face an increase of land prices.