1. New Delhi, India March 23-25, 2011

2. The Politics and Economics of Land and Housing March 24, 2011 12:00 Noon – 1:45 p.m.

3. By Robert H. Edelstein Fisher Center for Real Estate and Urban Economics University of California, Berkeley

4. A. International Context B. Demand Drivers C. Supply and Legacy Effects D. Public Sector Multi-faceted Roles

5.  World Demographic Drivers Retirement Health Care India Demographic Dividend  International Resource Competition Energy Supply and Demand Protein Upgrade Pollution Control Clean Industry Inflation Scenarios

6.  Housing Demand is a Derived Demand  Income, Financial Resources, and Housing Prices  Transportation Networks  Congestion/Density/Quality of Life

7. Income Distribution  Middle Class  Urban vs. Rural Demographic  Growth Rate  Age Distribution Hierarchy of Cities  Premier, Secondary, & Tertiary Areas

8. National Urbanization % Urban Population

9. India, China: Age Distribution Source: World Bank

10.  Land Use Density Determinants – Transportation Network Land Usage Rules and Practices Construction Industry and Technology Spatial Employment Distribution Technological Component  Existing Ownership Patterns and Land Use Governance  Competitive Hierarchy of Cities  Industrial Location and Mix Export/Import Models

11.  Demand Side Policies The Singapore Model The U.S. Private-Public Model  Supply Side Policies Land Use Planning, Use Control, and Management Infrastructure Optimization  The Regulatory Functions of the Residential Financial System The U.S. Great Depression Structuring vis-à-vis the Subprime Crisis Consumerism and Financial Rights Financial Institutional Oversight Secondary Market Organization and Monitoring

12.  A singular feature of the residential market in Singapore is the existence of a small private housing sector alongside a large state-sponsored and regulated public housing sector. Almost 86% of Singapore’s population live in public housing.  Capital gains from the HDB (public) secondary market are a significant factor in easing entry into higher quality private housing.  Public housing supports upward mobility from entry level housing; helps generate initial wealth accumulation.  Public housing is key determinant of overall housing market dynamics.

13.  Supply side Developer Tax credits for low income housing units Redevelopment programs with tax increment financing set asides for housing (package deals) Local fair share and below market rate requirements  Demand side Homeowner mortgage interest tax credit First-time homebuyer credits (temporary) Mortgage guarantee system and GSEs Rental housing vouchers

14.  Impact of zoning Stringent quality standards can reduce supply Allocation of land to non-residential uses Fiscal zoning, i.e. stress on commercial usage  Clear relationship between regulatory bottlenecks, land-use regulations and supply elasticities on one hand and house prices on other

15. Source: Bardhan, Edelstein and Kroll from from U.S. Department of Transportation Smart Growth America

16. 16

17. 17 HOUSEHOLD DEBT AND INCOME Sources: IMF, ADB, Euro Stat, CEIC, TIM Analysis