Strategic considerations in land use planning: the case of white sites in Singapore

Abstract

This paper adopts a game-theoretic Nash equilibrium approach to examine the issue of planning flexibility in terms of land use zoning and development by appealing to the 'white sites' programme in Singapore as a natural experiment. The key insight is that the existence of competing white sites diminish the potential profit-maximizing supply. While the flexibility in land use is valuable, it potentially introduces a supply inefficiency through the uncertainty embedded in the development decision -making process. In addition, it is never optimal to defer development when competing white sites exist and when demand stays unchanged, unless exogeneous factors constrain commencement of construction. It is further demonstrated that a first-mover advantage exists such that subsequent white sites released shortly after the first white site are likely to fetch lower land prices. Nevertheless, the land price would still reflect the alternative land use value. The predictions of our model are consistent with an empirical case study of proximate white sites.

Disentangling Housing Supply to Shift towards Smart Cities: Analysing Theoretical and Empirical Studies

“…Ong et al [60] apply a game theoretic Nash equilibrium approach to the issue of planning flexibility within land use zoning. The paper is based on the land use planning in Singapore and focuses on the "white sites" program in that country.…”

Optimal Timing of Real Estate Investment under an Asymmetric Duopoly

“…4 The third site earmarked for the future Business and Financial Centre (BFC) of Singapore was sold only in July 2005 through the government's land sale program.3 Marina South is the new downtown master-planned by the government, which consists of 50 hectares of land reclaimed from the sea. SeeOng, Sing, and Malone-Lee (2004) for details of the two white sites at Marina South planning area.…”