LAND POLICY

FOR

AFFORDABLE HOUSING:

ZONING ORGANIZING MODEL

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

Research Problem

• Residential land affordability as a factor of housing affordability.

• High rise of land prices in Jordan reduced homeownership opportunities.

• 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.

• 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.

Research Question

• how can land policy mediate in

the market to increase low-income

access to residential land?

Questions 1 What empirical evidence can be obtained on the

availability of land for various housing types, especially for the low-income housing?

2 What market outcomes actually affect land demand for low income housing? What estimates do sales records provide?

3 What are the determinants of raw land prices? What estimates do statistics provide?

4 What is the impact of subdivision into smaller lots on the land market? To what extent can size be an affordability criteria?

5 What empirical evidence available to assess policies of land division and income subsidies serving the low income?

key questions of the research

Objectives

1. To explore land use and economic variables relating to land market sorted by household income, land price, zone type and location of land supplied.

2. exploring in particular the impact of subdivision on market outcomes. The objectives are directed to small lot policies.

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

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.

 • 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%

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

• 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.

• 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.

• 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.

• 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.

• 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.

• 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.

• 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.

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

Land use planning and developmentThe project of the poor Development standards Land supply Land valueLand affordabilitySubdivision

Land marketAllocationDemandIntervention rationaleNeo liberalismSite and ServiceSubdivision

Land policyEfficiency and equityLand managementDirect intervention world bank Learning by doingSite and servicesubdivision

Poverty alleviationSuitability and acceptabilityAffordability standardssubdivision

• 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

• 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.

Policy Model Implication

• The greater justification for subdivision is its fundamental character as instrument to fight against two factors 1. poverty and inequality 2. property concentration.

• Policies should adopt subdivision on more than one level

Fig.

• 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.

• 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.

• 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.

• 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.

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

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.

• 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

• 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.

• 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.

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

• 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 .

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 resource allocation.“

• 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.

• 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.

• 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.

• 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 of the existing urban area- Subdivision and private decisions of land partitioning of these large parcels is usually followed by the provision of access roads and other service .

• 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

• 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

• 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.

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)

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.

• the opportunity cost of 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.

• 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)

• 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.

• This research however would consider the comparison the income of the poor and the price of land to be straight forward and reasonable. For, the economy of the poor shows that his calculations for building a small scale shelter, only when the price of land is paid, is rather incremental.

• if land account for 40-50% the price of a standardized unit of shelter which, in turn, should consume a third of the income in order to be affordable-. The increase in the price of land will affect this price of shelter but more than proportionately shown in a comparison between fixed land input (price) and the incomes of the poor.

• arguments differentiate between describing the increase as high or rapid. . A rapid rise in the price of simply reflects the fact that, over a time span, it used to have a lower current income than other assets. And thus makes up for this lower income

• In the cities of developing countries Some evidence, suggest that real land values in or near most urban centers have in fact continued to rise at a rate providing net yields that substantially surpasses market rates for comparable investments.

• Among the possible explanations are: active land markets and the lack of other forms of investment, overestimated and excessive land speculations, lack of adequate knowledge and rational expectations. In addition; unexpected turn of events.

• The increase in the economic value of land in and near urban areas occurs in jumps; different land policies for affordability has different impact according to the phase of anticipation.

• the most important is usually the initial transfer from rural to urban use.

• After the initial change from rural to urban use, the value of the now urban land will continue to rise, but more slowly as a result of changing locational advantages of the plot as towns and cities expand.

• At some later stage, however, there may be another sharp jump in capital value, brought about by the addition of urban infrastructure.

• A similar sharp rise in value will then occur in advance of the change in use, (including those for preparatory work, various costs of subdivision, the provision of urban services) .

Land speculation; the role of land policy and subdicision • Speculation, after all, arises from the weak enforcement

and possible modification of regulations.

• The allocation of use and density, replicated many times in a zoning and subdivision process, can become a major force in establishing the pattern of land values

• subdivision can confirm governments intentions; in countries anticipation, for example, of a historical drift toward land reform, the opportunity cost is low, one might expect a future surplus generated to be considerably low.

• The Zeus are an interesting answer were many Brazilian jurisdictions implemented an instrument that facilitates the regularization of existing informal settlements, these zones effectively lower prices; for they generate market expectations in relation to land reform residential low income lands

Poverty Reduction

• DefinitionsPoverty mirrors assets (human, physical, natural, social, financial, and intellectual capital).

Poverty mirrors assets (human, physical, natural, social, financial, and intellectual capital).

• The concept of a housethe issue is not so much of affordability as of suitability and acceptability of the investment

Land use Policy and land markets

• A Land use policy is essentially "an expression of the government perception of the direction to be taken on major issues related to land use and the proposed allocation of the national land resources over a fixed period of time. Land policy has a production and a conservation component

• The objectives generally put forward are: Efficiency and Equity while attempting to stimulate investments and land development. It is an important reality to be recognized: the context of enabling markets to work is different from that of moving the whole society towards Neo liberal ideals of decentralization and deregulation. These may result in different evaluations of policies.

• Although this section draws heavily from the World

Bank approaches, which, for the past three decades, has been the leading sector in low income housing in the developing countries-

• World Bank approaches are both creative and operative, especially the Learning by Doing. And its methodologies of reform really reaches grassroots. Yet, this analysis would rather add to short messages in some writings- pointing that the World Bank may criticize a successful policy (if not in the heart of capitalism) such as policies enhancing the realization, on the long run, of the wider role of government in land trading for general social purposes.

• the consequences of land market policy interventions as measures which generate the required increase in land supply and : (1) decreasing lot sizes, (2) increasing land partitioning incentives,

• Research results suggest that a very large amount of residential land can be provided through increased reliance upon well-targeted smaller- lot policies.

• rationale for intervention includes along with traditional reasons for the provision of public goods and signaling or dealing with externalities or spillover effect on nearby property which are particularly prevalent for the urban economy. Other reasons include imperfect information as foresight necessary to achieve economies of scale are more effectively obtained and transmitted by the government, market power gained by the suppliers of urban services which is very inelastic, time lag, uncertainty which leads to underinvestment, and minimum standards realization by the community.

• The need for land for low income housing is one of the immediate reasons for intervention; individual owners and users have little incentive to take account of it, the use of land by the highest bidder may not be considered the most socially advantageous.

• On the other hand, suppression of land markets tends to paralyze private development and to remove signals that are useful urban opportunities for the efficient allocation of land

• The latest development of theoretical work have predicted on liberalization, deregulation, and privatization. So there has been a revival in the laissez-faire approach.

• Nevertheless, the common rule that private land property and the real estate benefits, have limits, derived from the concept of the social function of the property (also global).

The relevanceof neo liberalism to low income housing • Concepts of neo liberal in World Bank guidelines may be recognized as follow:

• The concept affordability-cost recovery- replicability.

• Decentralization and privatization: "will modify how and at what levels informed decisions will be taken.

• Deregulation

• Overall the according to the neo liberalist reasoning should be recognized, subsidized housing ,for example, evaluated as induces an enlarged rural-urban, migration, The question of providing loans at below market rates of, from higher-interest interest raises wider issues. Commercial finance (Indian housing experience) has come under increasing criticism from the World' Bank, as inhibits flows of funds to housing and it distorts and suppresses patterns of saving.

Policy interventions • Intervention usually takes three broad

categories planning regulations, direct government investments and fiscal measures of subsidies and taxation a)

• Land management improvements Example: Land Readjustment

• direct public investmentExample: land banking

Example : Site-and-Service

The DEMAND MODELmethodology

• The land market is fundamentally described by household choices of location and lot size. The outcomes, as in all economics, arises from the interaction of demand (of household) and supply (of land parcel). Households are characterized by their income and preferences while land supply is characterized by quantity, location and lot characteristics. Household preferences can be represented by the price each household is willing to pay for each type.

• A research of the low-income household demand would further complicate the characterization of equilibrium by putting the word prefers in quotations.

• A useful approach, in this case is assessing the relative importance of the demand variables using models in the structural form1; that is, the basic form in which endogenous variables are allowed to be determined by one another. This form is more intuitive and expressive of the pathways different variables influence land demand and land price.

• Regression is used to estimate structural coefficients of the demand and price determinants. Regression is conducted on cross sectional income and land sales data for 2005 for 14 main urban centers in Jordan.

• These centers vary significantly in respect to urban growth rates while having fixed exogenous variables (variables determined outside the model).

 

• Disagregation is conducted In order to make the approach more appropriate for the research purpose, income quartiles are distributed in the demand function, allowing for land demand to be estimated separately for the low income group. Households fall into four income classes (h = {1,..,4}). The low-income is defined as the quartile class right above the household poverty threshold in Jordan of 2468 JD per year. Low income population have the mean earnings of 3035 (which is differentiated slightly through the urban areas) and account for 30% of the total population. Variables of income are substituted into the demand equation to report the most important changes that may affect the low income households bidding for land.

• The analysis describes the workings of the urban land market as interactions in which these households of various income levels choose among these distinct residential land types

• The analysis of land parcels makes two methodological contributions: internalizing the zone type as endogenous factor and incorporating a land supply which is spatially on the periphery.

• The analysis of land parcels makes two methodological contributions: internalizing the zone type as endogenous factor and incorporating a land supply which is spatially on the periphery.

 

• Information on lot size and price are collected from sales records for 2005 supplied by the Department of Land and Survey.

• Sales of real estates were filtered to establish a sample frame for sales on residential raw land accounting for 64680 sales in the 14 study areas. This frame was compared to assessment cards to establish a list of residential land within the development boundaries (rendered into residential zone types) accounting for 16220 sales. This frame was used to compute mean prices and lot sizes were computed for each type.

The total number of residential parcel sales and selected samples

Study area Total sales Sample

1 Amman 10770 250

2 Salt 620 50

3 Zarqa 1230 80

4 Rusaifa 390 25

5 Madaba 130 15

6 Irbid 770 50

Study area Total sales Sample

7 Ramta 270 15

8 Mafraq 780 40

9 Jarash 130 15

10 Ajloun 110 15

11 Karak 130 17

12 Tafeeleh 160 16

13 Maan 470 30

14 Aqaba 350 20

• Information on lot location and characteristic come from GIS parcel data supplied by the web site:

www.dls.gov.jo.• Systematic random sampling was used to

select 700 land parcels accounting for 5% of the sales on residential raw land within development. This sample is also representative of land basins according to number of sales. The web site was consulted for this sample to relate lot location and characteristics to price.

• Residential land demand in general is the result of private household income and preferences and public land use planning and policies.

• Thus the determinants of residential demand, or the proportion of household bidding for land, will depend on other variables such as household formation growth, household income and distribution, lot price which is dependent on lot area and zoning type, and the total of public and private subdivision decisions and exogenously determined land polices and national data

• National data,such as interest rates, stocks, and asset values are assumed fixed across the study areas or slightly differentiated as expressed by consumer retail price change rate..

Table 3.1: Summary Statistics for 14 urban centers in Jordan

MeanStd. Dev. Min Max

Number of house holds 71150.5 100904.8 13264 380285

Average household income 5116.1 678 4159 6570

Number of low income households 17581.2 22078.4 3541 79619

Average Assessed Lot Price (JD/m2) 17.7 21.5 2.5 81

Residential land lot sales 636 931 142 3680

Percent of small residential lots (max. 500 m2) .2 .08 .1 .39

Private land lot divisions 1171 1611 95 6530

• Total and low income households

0

50000

100000

150000

200000

250000

300000

350000

400000

amn slt zrq rsf mdb rbd rmt mfr jsh ajl krk tfl man aqb

hh no

low incom hhs

• Land sales and land divisions

0

1000

2000

3000

4000

5000

6000

1 2 3 4 5 6 7 8 9 10 11 12 13 14

no of small-lot sales no of land divistion

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

amn slt zrq rsf mdb rbd rmt mfr jsh ajl krk tfl man aqb

Series1

DEMAND ELASTICITIES

Table 3.13: Demand elasticities

Elasticities.45

Low income hhs

.23 Price

.47 Division

Demand variables are within the range of inelastic.

• Q : Demand quantity; number of sales of land parcels (small parcels and D zone type).• Y : Number of household in an income quartile (low income households with an annual income of 2460JD).• P : Mean parcel price per unit (JD/m²).• D : Number of land subdivisions (conducted on large parcels of land on the periphery• S : Parcel size (of land sales conducted on parcels of land on the periphery).• Z : Zoning type of residential land "D".

• The result indicates that changes in land demand of type C (assumed to be of interest to middle income housing investments) affect the demand for land of the lower income housing. Increases in demand for housing of the highest quality will not affect the low income demand.

• 2. 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.

• 3. Increasing the number of households in the low income group by 5% (for example by income subsidies supporting the poorest of the low income , or the poverty group, would result in 2.7% increase in the land demand for small parcels

• The disagdregated model for the first (main) equation uses the number of household, mean income of four household types (treatment of the income distribution) and mean price for three residential land types ( parcels of land sorted by price, zoning type) for each observed area. Given a specific income group x The model can express their demands for land type y as such:

• QD(y) = a + bY(x ) + b P(y) + dD + € • QD(y) : Demand quantity; number of sales of land parcels (small

parcels and D zone type).• Y (x) : Number of household in an income quartile (low income

households with an annual income of 2460JD).• P(y) : Mean parcel price per unit (JD/m²).• D : Number of land divisions (conducted on large parcels of

land on the periphery• € : Disturbance factor

• Three versions of the demand model are estimated: Model 1 with number of low income household;

• Model 2 with price added and no subdivision variable ; Model 3 with this subdivision variable added to Model 2;

• Model 1 is included as a base point for measuring the effects of the addition of the variables. As each independent was entered in turn into the regression equation. The most significant variable added would be the one which made which made the greatest reduction in the error of squares the variable that has the highest partial correlations with demand

• The parameter estimates in Model 1 are positive and statistically significant. Thus, indicating as expected in the hypothesis that low income households are potential consumers of this type of land; small lots of maximum 350 square meter or of type (D) in peripherical areas .

• The parameter estimate are improved by adding the price variable in Model The price parameter is positive as found likewise in other demand models. land demand increase due to increase in price may indicate anticipation, or speculations of rapid growth in price.

• All of the parameter estimates are statistically significant in the final Model 3 contrasted by adding subdivision supply factor and price has a stronger magnitude. This shows That the supply factor refines the income and price data in the demand model.

• The relationship between land demand and quantity of land supplied by is further tested singly and with the addition of price factor

• Results of positive and statistically significant parameters indicates that land demand is increased by land subdivisions and partitioning which occurs in the periphery. This result is consistent with the hypothesis

The Submodel: value/size

• In the second equation, the relationship between land price and parcel area is suggested to be negative and loglinear. This indicates that that land value increases at a decreasing rate as parcel size increase

P = a1 - log b1S + c1Z • P : parcel price per unit (JD/m²).

• S : Parcel size• Z : Zoning type

• The coefficient of the area variable is as expected in the hypothesis, negative This implies that land price per unit area increases due to subdivision at increases at increasing rates. The total price may thus be profitable for the land owner and affordable for the low income who is able to purchase smaller parcels. this has the potential of providing highly useful information to land developers regarding market trends in the profitability of the subdivision of a large tract of land into smaller parcels

• measuring the effect of zoning is crude in most of the analysis substitutions. it is perhaps made complex by the large tracts of land included in the sample. These tracts, at the edge of an urban area may be zoned residential, be in agricultural use and in anticipation for infrastructure. Thus have their price driven by many factors. Moreover, large parcels also anticipate rezoning which is highly likely when the parcels are subdivided. It cannot be predicted how the parcels in this study will be rezoned. Therefore, the zoning variable may not capture the true, ultimate land uses when the land is subdivided. A better enforcement of the plans while keeping subdivision flexible to buyer seller deals may lead to the refinement of such models

MODEL 4:

QD =42 + 3.1 (D)

2000 = 42 + 3.1 DIn order to investigate the sensitivity of this mode a short exercise was undertaken to compare the sennsitivity of the lower income households to the increase in accumelative decisions to devide land

Assuming that the housing demand for the city of Irbid for 2008 =6500 unit for tha year 2008, the lower income may account for about 2000 unit which by applying the model requires the number of devisions to be about 650 devision. The analysis finds that under thid scenario the increase in the devisions required is 50% more than the year 2005. municipality may achieve that by land management

• There are many who believe that the prime problem of the low income households market is the low income then a subsidy policy is the most efficient way to reduce the low income crisis.

• A major policy question is whether subsidies should be concentrated

• at the building level ,• at the households level or • at a geographical level( i.e census tracts with high

number of low income households.

• to determine the relative merit for each policy we need to analyze the impact of those subsidies on the long term behavior and quality of life of households

• In order to understand the economies of housing in low income areas we first need a substantial amount of research on the dynamics of low income households, buildings and neighborhood so that public policy interventions being proposed can be put into context of a dynamic market model with this macro context in mind.

• Poverty still existed but its settings has changed Situations of ten years ago has transformed when the economy seemed static and social structure paralyzed remedy could be advocated in terms of single solutions.

• Additional study is needed; for example there are very few facts about the distribution of urban land ownership among income groups

• Unfortunately, traditional sets do not include information regarding buyers and sellers. Data sets of housing sales with buyer and seller characteristics, such as income, family size, occupation of head of household, age of children, etc., should be gathered for subsequent analysis in order to better understand the role of buyer characteristics

• So far , there have been no carefully designed statistical studies of the price of land that would shed light on the various measures discussed above. Nor is this surprising the difficulties of definition, comparability, and sequence. Unfortunately, there is no corresponding corpus of accepted theory, of analysis of experience, or usually even of minimally adequate statistical material, against which to test the possibilities for improving conditions

• this research contributes towards the first step for the development of such standards. Using the first digital dataset and generating replicable findings that measures land patterns and prices, thus allowing for aggregation to the local and national levels. Over time, regular reporting should help develop time series.