Development density, administrative decisions, and land values: An empirical investigation

We found that administrative decisions (development and building permits) are capitalized in sales prices. Land with valid Decision on Development Conditions sold for 27-29% more than comparable properties. The implicit value of Building Permit was even higher as it increased the sale price by 47-50%. Additionally, we observed that potential density of development has a positive impact on land prices, but the effect is stronger for institutional investors.