Low‐rise buildings in big cities: Theory and evidence from China
研究中国地方政府如何设定容积率上限，发现财政收入增加会降低容积率，并指出土地财政模式加剧了住房可负担性和空间不平等问题。
Abstract This article explores the determinants of floor area ratio (FAR) limit, a major form of construction density regulation, in China. I develop a spatial equilibrium framework to study local governments’ optimal FAR design and investigate over 400,000 residential land transactions between 2007 and 2019 to perform the empirical analysis. Exploiting the exogenous variations generated by administrative adjustments and applying a propensity score matching approach, I find that a one standard deviation increase in local budgetary revenue decreases FAR limits by 0.29. Further counterfactual analysis suggests that the land finance model contributes to housing affordability issues and spatial inequality in China.