Why delay? Understanding the construction lag, aka the build out rate

Ball, Michael, Cheshire, Paul, Hilber, Christian A. L. ORCID: 0000-0002-1352-495X and Yu, Xiaolun (2024) Why delay? Understanding the construction lag, aka the build out rate. CEP Discussion Papers (CEPDP1990). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

We explore the determinants of the speed of residential development after dwelling construction starts. Using a sample of over 140,000 residential developments in England from 1996 to 2015 and employing an instrumental variable- and fixed effects-strategy, we find that positive local demand shocks reduce the construction duration in a location with average supply constraints and developer local market power. However, this reduction is less pronounced in areas (i) where local planning is more restrictive, (ii) that are more built-up, and (iii) where competition in the local development sector is lower. We provide a model that rationalises these results. Our findings imply that the slow build out rate in England is the consequence of both market and policy failures.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2024 The Author(s)
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor
JEL classification:	D - Microeconomics > D4 - Market Structure and Pricing > D43 - Oligopoly and Other Forms of Market Imperfection G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R21 - Housing Demand R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R31 - Housing Supply and Markets R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R38 - Government Policies; Regulatory Policies R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis > R52 - Land Use and Other Regulations
Date Deposited:	10 Feb 2025 15:36
Last Modified:	10 Feb 2025 15:36
URI:	http://eprints.lse.ac.uk/id/eprint/126820

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