Make Me a Better Offer: Developer Threats and Regional Competition for Land Development Projects

Abstract

To extract favorable terms from local governments, developers can take advantage of intermunicipal competition and threaten to relocate or abandon a land development project. Some say that model of regional competition undercuts the economic, environmental, and societal benefits of development while others claim it boosts the efficiency of municipal operations. The authors examine the likelihood that land developers will push local governments to compete against each other for projects. Their study of New York municipalities ( N = 306) finds that one third of local governments have been threatened and that one third of those reacted by reducing burdens or increasing incentives for developers. Their logistic regression model reveals that more cooperative intermunicipal relations across a region decrease the chances of developers threatening to move projects. Interestingly, the model suggests that public participation increases the chances of a threat.