Abstract
In recent decades, we observe brisk growth of ground lease-based land use systems, such as shopping centers and malls, and Common Interest Developments in retail and residential real estate, respectively. I argue that the ground lease system is an efficient response to the hold-up problem in urban land use, which is due to two spatial facts: the bundled consumption of a private good (land) and collective goods, and limited ex post mobility of landowners. The ground lease system incorporates the core merits of the Henry George view combined with Tiebout competition. But, bundled consumption may also require a tradeoff in property rights. The different characteristics of retail and residential real estate determine the dominance of the ground lease systems and CIDs, respectively.
Published Version
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