Premium
EXACTIONS IN THE NEW DISINFLATIONARY ENVIRONMENT
Author(s) -
Shulman David
Publication year - 1984
Publication title -
policy studies journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.773
H-Index - 69
eISSN - 1541-0072
pISSN - 0190-292X
DOI - 10.1111/j.1541-0072.1984.tb00329.x
Subject(s) - inflation (cosmology) , economics , illusion , land values , land tenure , product (mathematics) , politics , land use , value (mathematics) , public economics , geography , political science , law , engineering , physics , civil engineering , geometry , archaeology , mathematics , neuroscience , machine learning , theoretical physics , computer science , biology , agriculture
This study demonstrates that the growing use of exactions in the 1970s were a product of the inflationary environment which created the illusion that they were shifted forward to the ultimate consumer of housing. Instead, local governments, through the exaction process, were capturing a portion of the increase in land values induced by inflation. In many areas the increase in land values was so great that even after the imposition of exactions, the real value of land increased. However, as the economy disinflates, inflation‐induced profits disappear and the landowner realizes that he is bearing the burden of the exaction. As a result, the political concensus that favored the imposition of the exactions in the 1970s is forecast to break down in a low inflation environment.