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Mixed Uses and the Redevelopment Option
Author(s) -
Childs Paul D.,
Riddiough Timothy J.,
Triantis Alexander J.
Publication year - 1996
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00693
Subject(s) - redevelopment , flexibility (engineering) , economics , revenue , zoning , value (mathematics) , property value , property (philosophy) , boundary (topology) , constant (computer programming) , microeconomics , scale (ratio) , public economics , econometrics , real estate , mathematics , civil engineering , engineering , computer science , finance , statistics , geography , mathematical analysis , philosophy , management , epistemology , programming language , cartography
This paper considers how the potential for mixing uses and redevelopment impact property value. Operating flexibility of this type is found to significantly increase property value when the correlation between payouts from different property types is low or when redevelopment costs are low. The ability to mix uses and redevelop over time is also shown to affect the timing of initial land development. The shape of the development boundary is shown to differ considerably depending on whether marginal revenue is constant or decreasing to scale. Both policy and empirical implications concerning the effects of multiple‐use zoning are discussed.