PLAN103 Lecture Notes - Lecture 7: Opportunity Cost, Road Rage, Private Good
23 Apr 2016
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Borrow funds by incurring debt: when you can payoff over along time, life long return. Pay from existing budget: short life span for asset. Taxes: income taxes (redistributive, property taxes (collective benefit) Prices: development charges (lot levies, special assessments, user fees (those who benefit pay) Fiscal imbalance: issues with reliance on property tax as main source of finance, responsibilities downloading to municipality, higher service standards, aversion to borrowing. Urban growth in a market framework: land prices decline with distance from the center (rent gradient, agricultural land is cheaper than urban land, theory of highest and best use , transport improvements create access to cheap" land. Sprawl as market failure: cost of losing open space and agricultural land, social costs of congestion (and automobile use, full (actual) cost of infrastructure (service) provision. Difficult for market to provide pure public goods: cannot keep people from consuming who don"t pay (free riding) Combine competing agents: cities in the previous example.
