Floor Area Ratio and Urban Boundary Regulation in Monocentric Cities with Traffic Congestion

28 Pages Posted: 6 May 2009 Last revised: 6 Sep 2014

See all articles by Tatsuhito Kono

Tatsuhito Kono

Tohoku University - Graduate School of Information Sciences

Kirti Kusum Joshi

Tohoku University, Graduate School of Information Sciences

Yuichi Morita

Tohoku University

Date Written: May 22, 2009

Abstract

For a monocentric city with traffic congestion, Wheaton [W. C. Wheaton, Land Use and Density in Cities with Congestion, Journal of Urban Economics, 43 (1998) 258-272] describes that, to optimize the congestion externality, lot size zoning requires upward adjustment to the market population density throughout the city and that optimal lot size regulation is the first-best policy. We show that, in contrast to lot size zoning, optimal Floor Area Ratio (FAR) regulation is at most a second-best policy and requires, in a closed city, not only upward adjustment to the market population density at central locations by minimum FAR regulation but also downward adjustment at boundary locations by maximum FAR regulation. In an open city, only the latter is required. Furthermore, the optimal urban boundary is more compact than the market equilibrium boundary irrespective of whether the city is closed or open.

Keywords: Congestion, Externalities, Floor area ratio, Urban growth boundary

JEL Classification: R11, R13, R14, R52

Suggested Citation

Kono, Tatsuhito and Joshi, Kirti Kusum and Morita, Yuichi, Floor Area Ratio and Urban Boundary Regulation in Monocentric Cities with Traffic Congestion (May 22, 2009). Available at SSRN: https://ssrn.com/abstract=1399916 or http://dx.doi.org/10.2139/ssrn.1399916

Tatsuhito Kono (Contact Author)

Tohoku University - Graduate School of Information Sciences ( email )

Aoba 6-3-9
Aoba-ku, Sendai, 980-8579
Japan
81-22-795-4477 (Phone)
81-22-795-4497 (Fax)

HOME PAGE: http://www.se.is.tohoku.ac.jp/~kono/t-kono.html

Kirti Kusum Joshi

Tohoku University, Graduate School of Information Sciences ( email )

Japan

Yuichi Morita

Tohoku University ( email )

Japan

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
152
Abstract Views
1,268
rank
228,472
PlumX Metrics