Land and housing

Question 1

What are the characteristics of “land”?

Answer 1

• Finite
• Value based on natural features
• Value based on use
• Value based on location

Question 2

Give the straightforward definition for land:

Answer 2

Part of the surface of the earth not covered by water that can be utilized for various purposes

Question 3

Give the definition for “real estate”:

Answer 3

Land and everything that is (built) on it

Question 4

Give the definition for “property”:

Answer 4

Land and what is on it that when it is/that can be traded/exchanged

Question 5

Give the definition for “lease hold”:

Answer 5

A periodical lease price/payment for land (on which something is built)

Question 6

Give the two forms of leasehold:

Answer 6

• Continuous ground lease

- Perpetual ground lease

Question 7

What is the characteristic of continuous ground lease?

Answer 7

Every so many years the price is re-determined

Question 8

Explain perpetual leasehold:

Answer 8

The lease price is not re-determined, but only set once. Meaning the periodical price will remain fixed

Question 9

Explain “economic rent”:

Answer 9

The excess returns from the ownership of a natural (and scarce) resource

Question 10

Give a synonym for “unearned income” and explain how the feudal system is an example:

Answer 10

• Passive income

- The king earned a passive income simply by owning land and having his noblemen, knights and citizens make use of it

Question 11

Why does the state intervene in property?

Answer 11

• To limit the effects of extracting rent (bec. it can monopolize the growth of an economy)
• Other uses: promote public health, raise revenues, etc.

Question 12

How can planners influence the property market?

Answer 12

Planners can shape -> ex. public planners determine the use of an area
Planners can regulate -> ex. public planners make contracts with private parties
Planners can stimulate -> ex. (public) planners set up (public) private partnerships
Planners can increase capacity in the market -> ex. (public) planners can provide information about investing (investeerdersloket)

Question 13

Why does the state intervene in the housing market?

Answer 13

To compensate for market failures:

• the gap between cost of housing and ability of households to meet costs
• failure of market to take adequate account of housing fitness
• speed of societal changes (migration, household formation, etc.)