Cityscape and Land Use Regulation Cityscape and Land Use Regulation TERAJI, Yusuke (original) (raw)

2020, Tezukayama RIEB Disucssion Paper

In 2006, the Japanese supreme court has announced that the right to enjoy the cityscape should be protected. This statement makes local governments introduce the cityscape ordinance. In most cases, the ordinance takes mainly the form of the building height regulation in the city center. As in Bertaud and Brueckner (2005), the regulation results in the spatial expansion of the urban area while it protects the amenity value. In other words, when considering the building height regulation, it is necessary to consider the tradeoff between the commuting cost and the amenity value. Based on this tradeoff, we develop a model in which the historical district exists in the city center. By using this model, we evaluate the welfare effects of the regulation. According to the comparison of the outcomes under the regulation and the laissez faire development, we obtain the following results. First, the residents strictly prefer the building regulation if the marginal disutility of the overinvestment in the district is sufficiently large. Second, the regulation always augments the aggregate land rent. Also note that, in such situation, the building height regulation may become the second-best policy.