Leveraging Public Land Development Initiatives for Private Gain

Abstract

Land speculation has been an integral component of the political economy of land development in American urban history. In the American Sunbelt, land speculation occurs amid progrowth governance regimes that engage in intermunicipal competition for capital investment. This article presents a mixed-methods case study of vacant land speculation in downtown Phoenix, Arizona, before, during, and after the mid-2000s property boom. Results indicate that land speculation represented a significant barrier to both public and private infill development efforts, and that some municipal development initiatives actually facilitated private speculative profits. Speculative strategies are enabled when weaknesses in the coordination and bargaining power of urban growth regimes, derived from conflict within and between governmental scales, can be exploited by individual market actors. The self-propulsive nature of speculative property market cycles, unconstrained by local regimes increasingly dependent on nonlocal capital investment, represents an autonomous force actively orienting entries into property markets and influencing the ability to enact sustainable infill development.

Urban land speculation: model development

“…As a result, policy implication of Bahl's (1968) speculation model shows an important cost of capital, i.e. opportunity cost (Stanley, 2016), in which individuals' capacity to capitalize on the quantity and quality of their investment is reflective of the “length of the speculator's time horizon” (Smith, 1976) as well as “optimal period for holding” (Gaffney, 1961). Similarly, this can be expressed in terms of property tax, if it is increased, i.e.…”

Norm domestication challenges for local climate actions: A lesson from Arizona, USA

“…Yet, when it comes to urban planning, Fink (2019) argues that Phoenix tends to go toward top‐down governance, where government and businesses play significant roles in decisions with only a weak mechanism for community input through village planning committees (Bernstein et al, 2016; Iwaniec & Wiek, 2014). Stanley (2016) argues that such pro‐growth urban political and economic coalition remains yet is modified by the culture and knowledge‐driven economic development coupled with the real estate industry in downtown Phoenix. The city of Phoenix has been strongly influenced by state and federal actions, especially in water management, large‐scale infrastructures and real estate developments.…”

Institutional factors and the timing of land development: a survival analysis applied to the GZM Metropolis in Poland

“…, 2016; Stanley, 2016). As Stanley (2016) points out, land speculation may be triggered by the announcement of big public investments and when local government aims principally at attracting investors to cities and provide the space ready to buy and develop (Evans, 2004). The state may become a speculator itself.…”

“…Gul et al (2018) point at the role of real estate agents in land speculation, as they unveil new investment opportunities to the owners in order to gain commission. Likewise, local policy makers have their share in land speculation, by ineffective government interventions like imperfect regulations, badly written planning documents that require interpretation, improper enforcement of building regulations or corruption (Markowski et al, 2016;Stanley, 2016). As Stanley (2016) points out, land speculation may be triggered by the announcement of big public investments and when local government aims principally at attracting investors to cities and provide the space ready to buy and develop (Evans, 2004).…”