Revisit the Coase Conjecture : Monopoly, Durability, and Bundling in Urban Land Use

Although land and collective goods are bundled together, they could be provided separately. By studying intertemporal externality in land monopoly and analyzing the interaction between land market structure and the provision of local public goods, this paper conducts a comparative institutional study in the urban setting. I consider five institutional settings depending on whether land and collective good are provided in a bundle: private rental, public rental, private ownership, public ownership, and public ownership with restrictive zoning. The two-period model developed in this paper suggests that homeownership may result in more land development than leasehold. Numeric examples suggest (1) public ownership, i.e., the common form of government providing collective goods, may be efficient for more uniform distribution at large spatial scales; (2) rentals can be desirable for quot;poorquot; communities such as historic company towns; (3) private ownership, such as CID (Common Interest Development) and condominium, is more efficient for quot;richquot; communities; (4) restrictive zoning reduces social surplus, and quot;richquot; community may adopt more restrictive measures. These results may help explain why public institutions is the dominating feature of urban institutions and why most private communities are small-scale and located in the suburbs