The Game of Developers and Planners: Ecosystem Services as a (Hidden) Regulation through Planning Delay Times

Abstract

Planning delay time is a ubiquitous but under-researched land use regulation method. The aim of this study is to link planning delay time with the loss of urban locally provided ecosystem services (ULPES) caused by land development. Our main hypothesis is that the planning delay is an informal tool that ensures social welfare in a given urban area increases even if land is developed and the ULPES associated with the undeveloped land are lost. Whereas the developer’s objective is to maximize his profits, the planner’s target is to achieve the greatest social welfare, as calculated by considering public interest based on the value of open space and the developer’s expected profits. Our results show that, when the ULPES provided by an undeveloped parcel are sufficiently high, planning delay times can be used to prevent the execution of low quality initiatives and to only permit projects that improve general welfare and justify the potential ULPES loss. Planning delay times are interpreted as the expression of continuous negotiation between the interests of the public and those of real-estate developers, regarding the value of ULPES. The implication of the study is that ULPES values are introduced using a simple game-theoretic model allowing interaction between developers and planning authorities. The main significance is an alternative explanation for planning delay times as a consequence of ongoing negotiations between developers and urban planners that represent the general public in the city.