scholarly journals Rent-seeking Practices in the Housing Development Approval Process

2021 ◽  
Vol 39 (2) ◽  
pp. 25-49
Author(s):  
Abdul-Rashid Abdul-Aziz ◽  
Suhaila Ali
Keyword(s):  
House Prices ◽  
Rent Seeking ◽  
Planning System ◽  
Approval Process ◽  
Rent Extraction ◽  
Complex Development ◽  
Market State ◽  
Public Actor ◽  
State Actors ◽  
Rich Data

The lengthy, uncertain and onerous planning approval process in various countries around the world has prompted frustrated housing developers to seek influence by paying off approving officials. A research was conducted in Malaysia to investigate in greater detail this rent-seeking phenomenon by asking six fundamental questions. Rich data were obtained by interviewing 22 housing developers and consultants who work for them. Developers engage in rent-seeking behaviours to overcome genuine and artificial hurdles when applying for development approval. All approving agencies, though not all their staff, reciprocate to such behaviours. The monetary value of the payoffs depend on the rank of the public actor and project features. The higher the office holder is, the larger is the expected pay-off. Big and complex development projects in urban centres have a higher pay-off tag. Low value items television sets and car repairs serve to support normal lifestyle whereas high value items such as golfing and holiday trips support lavish lifestyle. Establishing good rapport is a prerequisite to the rent seeking and giving exchange. Elements which help foster reciprocity by state actors to housing developers’ rentseeking behaviours include low civil servant salary and high living cost, and weak punitive action. Common ethnicity facilitates nuanced communication by the latter, but common religion may dampen the former’s enthusiasm to accept any payoffs. Eventually house buyers and the general public are the casualties by virtue of higher house prices and substandard infrastructure. Given the combination of inherent features of the planning system and certain elements that impinge on state actors both of which promote rent-seeking practices, a realistic law enforcement solution is to prioritise illicit market-state exchanges involving grossly distorting rent extraction and pecuniary rewards of significant magnitude rather than total eradication of the practice.

The Property Lobby

2020 ◽  
Author(s):  
Bob Colenutt
Keyword(s):  
House Prices ◽  
Town Planning ◽  
Planning System ◽  
Housing Crisis ◽  
Government Grants ◽  
Radical Reform ◽  
The Uk ◽  
Holding Back ◽  
The Impact ◽  
House Building

Book Abstract: Despite countless reports and Government policy announcements on the housing crisis over decades, the scale and depth of the crisis continues. Homelessness, shortages of social housing, rents and house prices continue rise year on year. The word affordability has become meaningless. Land landowners and housebuilders and property investors have made huge profits out of this crisis. This book focusing in examples from London and Northamptonshire examines the power of the ‘finance-housebuilding ’ complex arguing that this property lobby is the main blockage for change and reform. It explains why the housing and planning system has become increasingly dysfunctional over the last 40 years accelerating with the impact of the 2008 Crash. The book gives examples of how the property lobby has been highly effective in manipulating Government housing and planning policy for its own benefit, to the detriment of those in housing need. It shows how the housebuilders business model, backed by Government grants and subsidies, has played a central role in perpetuating the crisis. The property lobby has succeeded in diverting attention from themselves onto the town planning system which has been scapegoated for holding back new house building. The result is that the housing crisis and the power behind it is hard baked into the UK economy. It must be addressed by radical reform of the property, planning and finance system. Without these reforms homelessness, poor housing, and lack of affordability will continue indefinitely.

scholarly journals Enhancing One Stop Centre in the Malaysian Planning System

2019 ◽  
Vol 101 ◽  
pp. 01001
Author(s):  
Marlyana Azyyati Marzukhi ◽  
Dasimah Omar ◽  
Oliver Ling Hoon Leh ◽  
Na’asah Nasrudin ◽  
Azfarnizam Jaafar
Keyword(s):  
Delivery System ◽  
Rapid Development ◽  
Planning System ◽  
Approval Process ◽  
Local Planning ◽  
The Public ◽  
Planning Decisions ◽  
Efficient Planning ◽  
One Stop ◽  
Development Applications

Malaysia has been experiencing rapid development since its independence in 1957, which has transformed its economic base from agriculture to industry. Rapid urbanisation has itself led to the continued rise of economic growth and the need for obtaining permissions from the relevant authorities to ensure an effective and efficient planning system. This effort is evidenced by the improvement of mechanism delivery system of planning and building plan process, known as One Stop Centre (OSC). The Ministry of Urban Wellbeing, Housing and Local Government initiated OSC on the 13th April 2007 to improve the planning delivery system and procedures at all local planning authorities by coordinating and shortening the approval process. However, relatively little is known about the effectiveness of OSC and the understanding of its roles among the stakeholders in the local authority. Therefore, a questionnaires survey has been conducted to forty-seven (47) respondents and interviews with the public that involved in the process. The respondents have mostly felt that the ineffectiveness of the planning and building plan approval process was due to the incomplete documents submitted to the OSC, lack of knowledge among the Professional Submitting Person (PSP) and the incapability of staffs in handling development applications. Hence, the findings present a synthesis of results for town planners, architects, developers and government agencies to have a better understanding of OSC. Thus, the knowledge serves as a basis for future strategic planning decisions and guidance in the delivery system in Malaysia.

scholarly journals RENT SEEKING DAN PRAKTIK KORUPSI DI TUBUH BUMD: KASUS BUMD PT BANTEN GLOBAL DEVELOPMENT (BGD)

2021 ◽  
Vol 6 (1) ◽  
Author(s):  
Mahpudin Mahpudin
Keyword(s):  
Rent Seeking ◽  
Global Development ◽  
Economic Actor ◽  
State Actor ◽  
State Actors

Artikel ini membahas tentang praktik rent seeking di tubuh Badan Usaha Milik Daerah (BUMD) spesifik pada PT Banten Global Development (BGD) sebagai perusahaan milik Pemerintah Provinsi Banten. Alih-alih memberi kontribusi terhadap Pendapatan Asli Daerah (PAD) dan pembangunan di Banten, PT BGD justru hanya menjadi alat perburuan rente antara state actor dan economic actor dengan memanfaatkan sumber daya keuangan yang dimiliki pemerintah untuk kepentingan ekonomi politik segelintir elit. Artikel ini berusaha memetakan pola rent seeking yang bekerja dibalik pengelolaan perusahaan PT BGD. Metode kualitatif dipilih dalam penelitian ini, adapun pengumpulan data dilakukan melalui studi literatur terhadap berbagai bahan bacaan yang relevan. Hasil penelitian menunjukkan bahwa pembentukan PT BGD menciptakan korupsi pada perusahaan pemerintah melalui praktik rent seeking. Pola rent seeking yang terbentuk adalah “rent seizing” yaitu state actors berusaha mendapatkan hak mengalokasikan rente yang dihasilkan dari institusi pemerintah untuk kepentingan individu dan kelompoknya. Di sisi lain, pihak perusahaan (economic actor) memperoleh keuntungan  dari kebijakan yang dibuat oleh elit politik dengan cara menyuap dan cara-cara lain yang melanggar konstitusi. Pihak perusahaan yang dimaksud tidak merujuk pada perusahaan swasta melainkan perusahaan milik pemerintah yaitu BUMD PT BGD.

The Political Economy of Rent Creation and Rent Extraction

2019 ◽  
pp. 532-549
Author(s):  
Roger D. Congleton
Keyword(s):  
Public Policy ◽  
Political Economy ◽  
Civil Law ◽  
Rent Seeking ◽  
Government Policies ◽  
The Political ◽  
Rent Extraction ◽  
Welfare Gains ◽  
The Creation ◽  
Gains And Losses

Rent Creation, Rent Extraction, and Rent Seeking are closely related concepts whose relationships are often misunderstood. For example, neither rent extraction nor rent seeking are possible until rents are created. Both rent extraction and rent seeking thus begin with the creation of rents. If one begins with the Hobbesian perspective on anarchy, all rents are ultimately the creation of government policies. Civil law determines what it means to own something, which includes an owner’s claims on the rents associated with his or her property and private activities. One in place, civil law also allows the possibility that rents can be created through private actions. Public policy may alter those claims through changes in use and rent-extraction rights associated with ownership. Such policies may create new rents or redistribute existing rents. In doing so, such policies induce rent-seeking efforts (or not) depending on the policies adopted and the manner in which rents are distributed. The welfare gains and losses associated with the various procedures for rent creation, rent seeking, and rent extraction imply that prohibitions against many, but not all, forms of rent extraction are warranted.

Land-Use Planning, Land Supply, and House Prices

1996 ◽  
Vol 28 (3) ◽  
pp. 495-511 ◽  
Author(s):  
S Monk ◽  
B J Pearce ◽  
C M E Whitehead
Keyword(s):  
Land Use ◽  
Land Use Planning ◽  
House Prices ◽  
Planning System ◽  
Social Benefits ◽  
Land Supply ◽  
Follow Up Study ◽  
Price Increases ◽  
The Relationship

There are clearly significant social benefits to land-use planning, but there may also be significant private and social costs which need to be taken into account. In this paper we explore the relationship between land-use planning, the supply of housing land, and the supply and price of housing. It is based on two pieces of empirical research. In the first study, an investigation was conducted of the extent to which land supply, and particularly the operation of the planning system, had affected house prices in Britain during the 1980s, and how far planning had placed a constraint on land supply or simply reorganised that supply. In the follow-up study a single planning area was looked at to examine the extent to which increased land allocations in one area can compensate for constraints on land supply in another. We conclude that the planning system imposes significant costs, which include the exacerbation of price increases in periods of economic growth, but without being able to generate higher housing output during recession. In addition the planning system tends to foster a narrower range of housing types and densities than would be expected in its absence, and so restricts the choice available to consumers.

Lexicographic Voting: Holding Parties Accountable in the Presence of Downsian Competition

2015 ◽  
Vol 15 (4) ◽  
pp. 1867-1892 ◽  
Author(s):  
Jan Klingelhöfer
Keyword(s):  
Political Parties ◽  
Electoral Competition ◽  
Maximum Level ◽  
Rent Seeking ◽  
Rent Extraction ◽  
Policy Positions ◽  
Forward Looking

Abstract This paper combines ideas from models of electoral competition with forward-looking voters and models of electoral competition with backward-looking voters. Two political parties can commit in advance to policy platforms, but not to a maximum level of rent extraction. In the case without uncertainty, the electorate can limit rents to the same extent as in a purely backward-looking model of accountability, and the policy preferred by the voter who represents the median preferences of the electorate is implemented. In the case with uncertainty about the bliss point of the representative voter, the electorate has to accept higher rent seeking by the incumbent politician, but nonetheless retains some control over rent extraction. The policy positions of the two competing parties do not converge as they do in the case without uncertainty. I show in an example that this nonconvergence can increase the welfare of the representative voter.

scholarly journals Political Centralization and Government Accountability *

2015 ◽  
Vol 131 (1) ◽  
pp. 381-422 ◽  
Author(s):  
Federico Boffa ◽  
Amedeo Piolatto ◽  
Giacomo A. M. Ponzetto
Keyword(s):  
Convex Function ◽  
Rent Seeking ◽  
Political Agency ◽  
Economies Of Scope ◽  
Federal System ◽  
Government Accountability ◽  
Rent Extraction ◽  
Taste Heterogeneity ◽  
Voter Information ◽  
Information Heterogeneity

Abstract This article explains why decentralization can undermine accountability and answers three questions: what determines if power should be centralized or decentralized when regions are heterogeneous? How many levels of government should there be? How should state borders be drawn? We develop a model of political agency in which voters differ in their ability to monitor rent-seeking politicians. We find that rent extraction is a decreasing and convex function of the share of informed voters, because voter information improves monitoring but also reduces the appeal of holding office. As a result, information heterogeneity pushes toward centralization to reduce rent extraction. Taste heterogeneity pulls instead toward decentralization to match local preferences. Our model thus implies that optimal borders should cluster by tastes but ensure diversity of information. We also find economies of scope in accountability that explain why multiplying government tiers harms efficiency. A single government in charge of many policies has better incentives than many special-purpose governments splitting its budget and responsibilities. Hence, a federal system is desirable only if information varies enough across regions.

scholarly journals We zoned for density and got higher house prices: Supply and price effects of upzoning over 20 years

2020 ◽  
Author(s):  
Cameron Murray ◽  
Mark Limb
Keyword(s):  
Regression Models ◽  
House Prices ◽  
Housing Prices ◽  
Housing Markets ◽  
Planning System ◽  
Similar Increase ◽  
Price Effects ◽  
Price Growth ◽  
Study Interval ◽  
Private Housing

Does planning for higher density increase housing development and decrease housing prices? We study the outcomes of planning for density in established suburbs over a twenty-year period using a large site-level dataset on dwelling stock, planning regulations, and prices, in 19 planned densification areas (activity centres) comprising 25,775 sites in Brisbane, Australia. Planning rules in these areas were repeatedly relaxed to allow for higher density; a policy change that should have observable price effects. To study the effect of zoning, we create a variable for each site called zoned capacity, which is the estimated number of additional dwellings able to be built under the planning code. Only 2% of the zoned capacity was taken up in any five-year study interval. Zoned capacity doubled over the whole twenty-year study period (going from 0.9x total dwellings to 1.4x), however despite these changes, 78% of sites with zoned capacity in the first period remained undeveloped. Higher rates of new housing supply are robustly related to higher prices despite demand arguably seeing a similar increase across locations. Our zoned capacity variable has no relationship to price across numerous regression models and is robust to various data selection choices. It could be that planning is not a binding constraint on new housing in Brisbane—yet price growth over our study period is comparable to other Australian cities. This evidence suggests that private housing markets will not rapidly supply new housing and cause significant price reductions, even if the planning system allows it.

scholarly journals Asymmetric yardstick competition: traditional procurement versus public-private partnerships

2021 ◽  
Author(s):  
Giuseppe Di Liddo ◽  
Annalisa Vinella
Keyword(s):  
Rent Seeking ◽  
The Other ◽  
Yardstick Competition ◽  
Rent Extraction ◽  
Private Partnership ◽  
Competition Mechanism ◽  
Contractual Arrangements ◽  
Project Governance ◽  
Different Levels ◽  
Over Time

AbstractWe consider local jurisdictions where rent-seeking administrators undertake identical infrastructure projects, choosing between two contractual arrangements: traditional procurement (TP) and public-private partnership (PPP). A yardstick competition mechanism is triggered through retrospective voters’ electoral decisions. A regime with TP in one jurisdiction and PPP in the other is likely to arise when projects are mildly lucrative and/or jurisdictions have moderate fiscal capacity. In this equilibrium, incumbents provide different levels of public services, face different re-election probabilities, and obtain different rents. By differentiating the project governance, incumbents specialize in rent extraction over time, thus hindering yardstick competition although jurisdictions are otherwise identical.

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