Local Housing Supply and the Impact of History and Geography." Urban Studies 48(14

This paper considers the impact of existing land use patterns on housing supply price elasticities in local areas of England, under existing planning policies. The paper demonstrates that, despite common national planning policies, local supply responses to market pressures vary considerably, because of differences in historical land uses. The study area covers the Thames Gateway and Thames Valley, which lie to the east and west of London respectively. However, whereas the latter is one of the wealthiest areas of England, the former includes some of the highest pockets of deprivation and was a government priority area for increasing housing supply. Due to differences in historical land use and geography, the price elasticity in the least constrained area is approximately six times higher than the most constrained. Gyourko and Saiz (2004) demonstrate how renovation expenditures on the existing stock decline strongly in areas where market values are below construction costs. These are exam-ples of spatial lock-in; once areas have been developed, it becomes difficult to change their basic characteristics. The extent and speed at which areas are (re)developed depend on the responsive-ness to market pressures, captured in the price elasticity of supply. In the Glaeser and Gyourko model, supply is more inelastic in a downward direction. In the UK, the conven-tional wisdom is that supply is inelastic in an upturn, because of the rigours of the land us