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How does municipal land use planning affect the organization of cities? The mantra of planning is that planners fix problems created by the private market; many of these problems are characterized in general as “sprawl“ . This chapter considers a linear program model—a simplified version of Schlager (1965) —in which planners allocate uses (demand for land fixed in quantity for each use) to zones (land supply fixed in each zone ) within a city to be efficient. Schlager then imagines the planner’s problem as allocating, by types of land use, the amount of each land use in each zone. Presumably, a zone is an area within which the unit cost of developing land for a particular use is everywhere the same. The planner’s problem is to find a design that minimizes this total cost subject to two sets of constraints. First, the land use allocation for any zone must not exceed the amount of available land there. Second, the aggregate amount of land needed for each use must be supplied. Each constraint generates a shadow price : the opportunity cost of supplying the marginal unit of land use demanded or of the last unit of land supplied in a zone. The dual to this model tells us that planners allocate uses to zones in a way that mimics the operation of a competitive market for land and therefore gives us a baseline (foil) for thinking about the impact of other planning actions. In this model, I show the equivalence between a planned city and a city in which all land use allocation is through a competitive market in land.
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- A Simple Model of Land Use Planning in the Urban Economy
John R. Miron
- Chapter 15