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LAND POLICY FOR AFFORDABLE HOUSING: ZONING ORGANIZING MODEL PowerPoint Presentation
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LAND POLICY FOR AFFORDABLE HOUSING: ZONING ORGANIZING MODEL

LAND POLICY FOR AFFORDABLE HOUSING: ZONING ORGANIZING MODEL

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LAND POLICY FOR AFFORDABLE HOUSING: ZONING ORGANIZING MODEL

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  1. LAND POLICY FOR AFFORDABLE HOUSING: ZONING ORGANIZING MODEL

  2. Abstract • A structural model of the residential land market describing of the demand and the supply variables in connection with the low income housing. • The potential of policy interventions are assessed to increase the supply of land for low-income housing

  3. Research Problem • Residential land affordability as a factor of housing affordability. • High rise of land prices in Jordan reduced homeownership opportunities.

  4. the need to promote land demand for the low income housing using a more precise empirical statement of land sale and market variables. • the need for market analysis to adjust and enhance land subdivision to be used more effectively as an affordability measure.

  5. Despite the massive overall improvement in the national housing stock and land market, over the last five years, little is known about meeting the housing demands of the lower income households. • Simple statistics show that low income households (less than 30% of region median) have increased by 20% between 2000 and 2005, while land prices have been driven up by 200%. Whole regions have become less affordable with more economic and locative issues related to the low income settlements.

  6. Research Question • how can land policy mediate in the market to increase low-income access to residential land?

  7. key questions of the research

  8. Objectives • To explore land use and economic variables relating to land market sorted by household income, land price, zone type and location of land supplied. • exploring in particular the impact of subdivision on market outcomes. The objectives are directed to small lot policies.

  9. Context • Zoning configured by the market has more capacity to qualify lower types of residential land as affordable, in terms of subdivision standards. • A market- based allocation and lot size zoning configured by the user preference. • Market approaches should be aplied to production of lower zoning types treating the low income households in essence as initiators and respondents to the market

  10. Data Description • The study area of this research is the main fourteen urban areas in jordan: Amman, Salt, Zarqa, Rseifa, Madaba, Irbid, Ramtha, Mafraq, Jarash, Ajloun, Karak, Maan, Tafeelah and Aqaba. • The data used is cross sectional sets on land sales and income conditions for 2005. The selection of variables is based on the conceptual framework of the workings of the market outlined in the previous sections. • Data on income and population, income distribution by quintile for each study areas come from the Census of Population and Housing for 2004.

  11. Parcels of land are also distributed allowing for the price of land for housing of the lowest quality to be estimated separately. Parcels are sorted by parcel characteristics (price, size, location, zoning type). Land parcels fall into three distinct types (L = {1,..,3}). The type of land for low income housing the analysis considers smaller parcels rendered as zone type “D” and lying mostly in the periphery. The zone type "D" characterizes low income neighborhoods by small areas (100-300m) and maximum density or building ratio of 58%

  12. QD = a + bY + cP + dD P = a1 + b1S + c1Z • QD : Demand quantiy; number of sales on land parcels (parcels providing low income housing). • Y : Number of household in an income quartile (low income households with an annual income of 2460JD). • P : parcel price per unit area (JD/m²). • D : Number of land partitioning decisions (conducted on large parcels of land on the periphery • S : Parcel size • Z : Zoning characteristics; design- related restrictions

  13. The impact of changes in demand and supply variables of the residential land market on the proportion of low-income households responding to this market. • Land demand of the low inome households is a function of income, price and quantity of land supplied. The last variable is indicated by the land divisions of large land parcels nearby an urban area into smaller parcels.

  14. The impact of changes in land use variables on land prices. • Size variation of sites, location, and residential zoning type, are locally variable functions of prices.

  15. the relationship between land demand and proportion of low income households is expected to be positive and linear. All the transactions involve small (maximum of 350 square meters) parcels of land. Thus, a positive and statistically significant relation would indicate that low income households are potential consumers of this type of land.

  16. The relationship between demand and price is expected to be negative and linear. If this parameter estimate is negative, it indicates that land demand is decreases due to the increase in the price per square meter. The reverse holds if this parameter estimate is positive.

  17. The relationship between land demand and quantity of land supplied by land subdivisions and partitioning- is expected to be positive and linear. Here, the research looks at large parcels of land at the periphery of an urban center in the process of being divided into smaller parcels. Land divisioning or partitioning is a land development decision induced by price, physical characteristics and public policies. A positive relationship would indicate that land demand is increased by the accumulated decisions to divide land.

  18. In the second equation, the relationship between land price and parcel area is expected to be negative and nonlinear. This indicates that that land value increases at a decreasing rate as parcel size increases, Thus price per square meter decreases due to subdivision also at decreasing rates.

  19. Expectations concerning zoning are complicated by the various size of the parcels included in this study. In general, the least densely developed the residential land, the higher the price per parcel. Land which is residentially zoned (D) tends to be the most densely developed, and it is hypothesized to be traded at the lowest price per parcel of the four types of zoning(A), (B), (C) and (D)examined in this study.

  20. The progress of themes in research areas towards a focus on subdivision.

  21. The policy demand model is constructed in the following form QD = (-208) + ( .02) Y + ( 4.7) P + .3(D) log P = ( 3.1) –( .8) log S

  22. Policy Analysis • 1. Substituting in the price model shows by dividing a parcel of 500 square meter into a parcels of 250 square meter the change in price would be equal to 8 JD/m2 (33.72 jd/m –15.7jd/m). Holding other variables constant in the demand equation, such change in price would cause a 13% increase in the demand for small parcels.

  23. Policy Model Implication • The greater justification for subdivision is its fundamental character as instrument to fight against two factors • poverty and inequality • property concentration. • Policies should adopt subdivision on more than one level

  24. Fig.

  25. Generally, this analysis concludes that urban plans do work for the advantage of the low income. Almost all towns of any size have plans, varying from simple maps to highly detailed master plans. Plans are better rooted in the perception of the urban poor where he recognizes the most vulnerable places for his project.

  26. The analysis regards the Guide planning (referred to earlier as a technique employed in smaller cities of Brazil) to be inspirational. the analysis suggests the following process. • Designating gross areas,which has the advantage of not upsetting the working of the markets by predominant sizes, anticipating self-enforcing dimensioning, the district may be is detailed on the plan when the demand in function and character is clear.

  27. Application to larger regions would be to divide the land into broad categories that includes critical, and stable. and then to concentrate mainly on the critical areas, prioritizing then the low income share of land as gross areas, leaving subdivision to be first sensed by buyer and seller dealing, detailing may then be refined.

  28. A double action of anticipating market signals and providing information to the market. • This process should be able generate information that may cause re-sizing subdivision to local conditions Different detailing in subdivision may also be appropriate even for some low-income peripheral areas. • It should be performed rapidly, by a municipal planning agency which is usually a level closer to the low income and local knowledge.

  29. Information regarding future subdivision potential can be extracted from the data.

  30. Policy Analysis and policy making • In order to investigate the sensitivity of this model a short exercise was undertaken to compare the sensitivity of the lower income households to the increase in accumulative decisions to divide land • Substituting in the price model shows by dividing a parcel of 500 square meter into a parcels of 250 square meter the change in price would be equal to 8 JD/m2 (33.72 JD/m2 –15.7JD/m2). Holding other variables constant (at their average values) in the demand equation, this change in price would cause a 13% increase in the demand for small parcels. • An increase in the number of land divisions by 30% (for example, adding to the national average of 1170) would result in 15% increase in the demand for small parcels. • Increasing the number of households in the low income group by 5% (for example, by income subsidies supporting about 500 households of the poorest of the low income, or the poverty group), would result in 2.7% increase in the land demand for small parcels.

  31. Accepting urban planning even in a market-based policy. Urban plans are useful instruments that work for the advantage of the low income. Almost all towns of any size have plans, varying from simple maps to highly detailed master plans. Plans are better rooted in the perception of the urban poor where he recognizes the most vulnerable places for his project. • Designating gross areas, which has the advantage of not upsetting the working of the markets by predominant sizes, anticipating self-enforcing dimensioning. The district may be is detailed on the plan when the demand in function and character is clear. Here, the analysis regards the guide planning (referred to earlier as a technique employed in smaller cities of Brazil) to be inspirational. • Application to larger regions would be to divide the land into broad categories that includes critical, and stable. And then to concentrate mainly on the critical areas, prioritizing then the low income share of land as gross areas, leaving subdivision to be first sensed by buyer and seller dealing. • A double action of anticipating market signals and providing information to the market. This should be performed rapidly, by a municipal planning agency which is usually a level closer to the low income and local knowledge. • This process should be able generate information that may cause re-sizing subdivision to local conditions. Different detailing in subdivision may also be appropriate even for some low-income peripheral areas. • Finally, it will be a matter of for project monitoring to establish the strength and weaknesses of these policies. • In the context of neo-liberal ideals this process seems to fit, but outlines should be drawn: • Communities which are originally resilient to debt should be helped by the policy to maintain this character. • The government social role is direct in attacking poverty and supplying the poor with homeownership

  32. The research model, being based on cross sectional data, allows for national policy making. Constructing this model to serve on a municipality level requires it to be based on time series data. • Conclusion: subdivision is the most important determinant of low income land demand for the low-income population. • Policy: Promote land sales for the low-income by subdivisioning most new and undeveloped land parcels. • Policy recommendations: considerations should be given to creating additional "D" zoned areas since this will continue to be the preferred style of urban development for many members of the low income groups. Since a large proportion of land on the urban periphery has already been zoned "AB" or "C" it may be desirable to rezone certain of these areas into "D" and "F" or adopting a land readjustment (downzoning). Consideration also should be and giving permitting further reduction to plot sizes down to 150m2 , by putting into effect the legislation that permits such a level of zoning.

  33. Conclusion: Low-income land demand is increased by private decisions to divide land. • Policy: Promote land sales by increasing incentives to facilitate land divisions ( and real estate properties in general). • Policy recommendations: municipality should adopt land management measures such as removing or relaxing taxes and constraints on the process of plotting land. • This would be very effective in the "D" zone where resident land owners predominate. Thus encouraging land owners to a more rapid development of their lands, either according to a parcelation scheme approved by the municipality or by a readjusting scheme.

  34. In the context of neo liberal ideals this process seems to fit bur outlines should be drawn • Communities which are originally resilient to debt should be helped by the policy to maintain this character • The government social role is a direct in attacking poverty and supplying the poor with homeownership. information and coherence

  35. The Municipality can achieve that by • Creating additional d zone areas since by this will continue to be the preferred style of urban development for many members of the low income groups. Sinse a large proportion of land on the urban periphery has already been zoned AB or C it may be desirable to rezone certain of these areas into DF or adopting a land readjustment (downzoning) • Removing or relaxing consstraints ithe process of plotting land (this would be very effictive in the D zone where resident land owners predominate). Thus encouraging land owners to a more rapid b their lands either according to a parcellation scheme approved by the municipality .

  36. Low Income Development, Land Related Definitions • Land use planning In recent definitions "is a systematic procedure carried out in order to create a sustainable land development which meet people's needs and demands. It assesses the physical, socio economic and institutional potential and constraints, and empowers people to make decision of resourceallocation.“ • Giving value to the developments or investments realized by families which, for residential development, may be achieved by incorporating indicators for clearer market signals of demand pressure in certain tracts or locations for certain types of housings. This "first" reaction to the user demand is the focus of the current analysis.

  37. Land development, which people call the "project", is "the improvement of land for any purposes regardless of the number of occupants or tenure, coupled with the division and allocation of land or space for the purpose of urbanization." • Yet, the project of the urban poor needs factors of development that goes beyond the basic zoning. It needs the map to generate opportunities to affordable plots in the necessary places; small plots, in terms of size. • Subdivision comes to the fore front as the instrument to be employed for adjusting the physical aspects of the plots to particular and local conditions. Subdivision should be equipped with technical information; market signals of prevailing locational opportunities and plot physical dimensioning and clustering that is compatible with low income household economy.

  38. the output, which people call "map" rather than plan, is information open to all, and requires not only the plan but the very same city, its land development opportunities and resource allocation, must be understood and subject to many possible contributions and criticism of all kinds to suggesting alternatives or corrections. • The research would consider this to be the "second" reaction to the user's demand (proposals). This process, whether in traditional or more recent approaches, is in the base of local diversity, and access to land for the poor should be first acknowledged here.

  39. Accordingly, policies for affordable land supply requires that expansion areas be checked for (a) sufficiency, (b) diversity and (c) distributional effects of housing plots, with a stronger idea of demand (proposals), and a stronger perception of the essentiality of subdivision in creating differentiality, Land supply unchecked for these criteria will only raise the price of land via competition. • land supply tends to by converting rural land at the periphery ofthe existing urban area- Subdivision and private decisions of land partitioning ofthese large parcels is usually followed by the provision ofaccess roads and other service.

  40. This is the underlying concept; increasing the total quantity of urban land is the way for the containment in land values. Then, with a larger supply, policies for the low income access can use less modifying techniques and have greater success- once considered against the background of overall resource constraints and alternatives

  41. But, major land problems of insufficiencies are caused by land supply (availability) being independent from land demand (allocation) the reason suggested is the supply is determined primarily through the planning system while demand depends upon the housing market

  42. From the analysis point of view, the problem of demand and supply mismatch is one of information rather than duality • methodologies which have been attempted to combine the strength of planners and developers utilizing demographic forecasting with the market indicators criticized developers "for the lack of consensus” • Latest arguments suggest that it is the public sector which "should be able to obtain, transmit, or evaluate information more effectively than the private sector". This analysis, relied on the legal framework related to the land market in order to obtain information. It shows that results from this fragmented market, can be reached.

  43. land supply; the role of planning and subdivision • 1. Plans • 2. Urban growth boundaries • 3. Zoning restrictions • 3. Building Regulations • 4. Subdivision Land value and affordability Land prices is the present market value of a parcel and it emerge only when sales take place. The actual land price might challenge any definition. But the reported land price of more frequent sales of particular types of land in a certain tract would offer a conventional and domestic knowledge that may be the only one available. (Even if the reported "prices" of land are in fact based on assessments or appraisals, these would normally be geared to actual land transactions)

  44. Land value and affordability Land prices is the present market value of a parcel and it emerge only when sales take place. the reported land price of more frequent sales of particular types of land in a certain tract would offer a conventional and domestic knowledge that may be the only one available. (Even if the reported "prices" of land are in fact based on assessments or appraisals, these would normally be geared to actual land transactions) Land value might be defined as market and capital values are measure private profit and productivity,but they do not necessarily reflect social values of resource or output. Social values may cause significant deviations around (usually above) the free market values. Many factors: influence land values: the supply of sites of different types and the demand for such land, the physical characteristics of the Land it; accessibility, and its services and development capacity.

  45. the opportunity costof land. This might be thought of as the planning price of land: ".the expected value from the land in its most likely alternative use", (next to the present, reasonably predicted alternative) • Changes in the opportunity cost reflect changes in the profitability of land owing to changes in preferences, production, technology, and in the regulatory environment of land use laws, regulations, or customs. • The problem lies where land opportunity costs are calculated excessively as a high proportion of present market value, partly as a consequence of excessive speculative use of land. And thus "when government may impose differential taxes, subsidies, In principle, these measures may indicate what the government intends to bridge the gap between private and social cost and so help determine the correct opportunity cost. • Even where a free market exists, in order for land prices to be affordable (for any sector), it should generally be treated as no more than the starting point for the calculation of economic costs.

  46. land affordability • a) standard of comparison for the rise in land price and • b) differentiating between "high" and "rapid" increase in land price of measuring changes in land prices, • c) The transitional points, at which the increase of economic value, for any site, is likely to occur ( as jumps)

  47. Examining land price change it may be reasonable to compare urban land prices with asset prices or with non urban or serviced land for comparison. • Since the primary concern about the expense of urban land arises from the assumption that the urban poor cannot afford to buy a plot of land, theoretical discussions suggested that land prices might be judged by the income of the poor, while regarding land as one input in the rising cost of shelter provision or dwelling rental for the poor, which is the obvious measure of the material well-being of the community as a whole.