Economics Essay Example | Topics and Well Written Essays - 750 words - 14

Economics - Essay Examplepends on government regulations and zoning government which whitethorn mark record as being in industrial, commercial or residential zones which may reduce the varieties in which land could be used. For example, prime station sites in the middle of a restless city may be zoned for parks or public recreational beas and no matter how a good deal developers want to use that land for create high rise apartments or offices, the land remains unaffixed of buildings (Cem.ac.uk, 2008).In fact, even when demand changes to seek more industrial land in or close to a city or more residential sites, government policy may be let up to react to the demand which could significantly increase the price of land currently zoned to be industrial or residential. The problem of zoning or rezoning is only multiplied when we consider how existing buildings no rezoned land may create problems for developers especially if the buildings are in congested areas or have significan t historical or cultural importance (Cem.ac.uk, 2008).At the same time, there is no cost of production associated with land itself. This is because the primeval determinant of what value can be derived from land comes from the best use land can be put to. However, owning a piece of land in a certain area gives the landowners the power of monopoly since they are the single owners of the site. New production of land with the same specifications in the same space is impossible thus they can charge monopoly prices if they so desire (Cem.ac.uk, 2008).The monopoly ownership makes land an appreciating asset of course things such as an oil spill near a beach can significantly decrease the value of beachfront property but there is little chance of new land being created in significant numbers. This besides encourages land hoarding as speculative ownership of land may lead to profits when mighty zoned land becomes scarce in a given region (Cem.ac.uk, 2008). In this manner, speculators and those who are hoarding land may be quick to offer the