Decisionmaking by Residential Developers in Santa Clara County

by Elizabeth S. Rolph

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An analysis of the forces that influence residential developers' decisions about what kind of project to build, where to locate the project, and whether or not to compete in a given geographical area. A formal interview schedule was developed and administered to a sample of nine development firms representing a full range of both firm characteristics and residential project experience. The analysis led to these general conclusions: (1) A large portion of residential developers' choices can be traced to the history, size, and organization of their firms. (2) Local government has some potentially effective policy tools for shaping growth, including its general attitude toward growth, its zoning powers, and its control over pricing of critical utilities and their extensions. (3) Government programs for low-cost and mid-density housing are less effective than they might be because most developers are anxious to avoid the red tape involved in application and negotiation processes with government agencies. (Interview schedule included.)

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