By George Fallis (Auth.)
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Extra info for Housing Economics
Sample text
Like any production, the level of output will depend upon the price of stock, the technology of production, and the prices of inputs. Relatively little is known about the production of housing stock through the maintenance and renovation by homeowners and landlords, but a stylized picture can be provided. Some of the maintenance is done by homeowners or landlords themselves, other is contracted to small firms of plumbers, roofers, or painters; and major renovations are organized by a contractor who subcontracts with these small firms.
At the height of the housing boom in the mid-seventies in Canada, land was almost 30 percent of the cost of new NHA financed homes, but a long-run average is nearer 20 percent (Land Task Force, 1978)5. 8. 2. The long-run supply curve is likely very elastic. THE SUPPLY OF HOUSING 57 THE INVESTMENT DECISION It is useful to complement the framework set out above with a more intensive look at the decision by a single firm to build new housing stock. The principles developed could also be used to analyse the decision to add new stock to an existing dwelling.
There are no legal performance standards governing residential developments, and the approval process involves intensive interaction and negotiation between builder-developer and local governments. Scores of agencies or departments must approve or have the right to comment on a plan; and often public hearings must be held on the plans, and people have the right to appeal the decision of local government. The process of securing government approval usually takes from twelve to eighteen months and in many instances has taken several years.