The impact of building height limits on welfare — a structural open-city model analysis for Helsinki
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School of Business |
Bachelor's thesis
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Date
2024
Department
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Mcode
Degree programme
Taloustiede
Language
en
Pages
28+4
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Abstract
This thesis applies an existing structural, theoretical vertical-horizontal open-city model to examine the effect of building height limits on welfare in the Helsinki metropolitan area. I analyzed various counterfactual scenarios with the model, showing that the population, wage index, and welfare could increase in the Helsinki metropolitan area as height limits increase. The results of using the model suggest that relaxing the height limit from 7 to 8 floors could potentially lead to a 3–6 % increase in welfare compared to the current GDP of the area. Additionally, completely removing height limits in Helsinki could potentially result in a gain of up to 60 % over time. Sensitivity analysis brings confidence to the robustness of these results. However, the model’s simplified assumptions and lack of Helsinki-specific parameters suggest that these findings should be interpreted cautiously, especially in the case of full deregulation. Based on the literature review and my results with a structural open-city model, the thesis concludes that relaxing height limits could benefit Helsinki and the wider society.Description
Thesis advisor
Terviö, MarkoKeywords
building height regulation, urbanization, urban density, city model