The impact of fiscal policies and community services on housing market dynamics and urban land rent in crisis – The comparative analysis between Florida and Spain

Florida and Spanish coastal areas are two major destinations, where American and European citizens, mainly older persons from North of these two continents, are buying properties where they intend to move when they retire. Therefore until 2007, the flow of older inhabitants to the south was increasing rapidly, influencing the dynamics of housing construction. For example, in 2006 only the yearly growth of transactions in Spain was 30%, but after the crises, the inflows were fallen, and a yearly number of all housing transactions since 2007 till 2014 has fallen more than 30%. The flow of foreign buyers participates to the housing transactions more than 17%. When total number of all transactions in Spain was also decreasing in the time window 2012-2016 with minimum in 2014, so that the index 2014/2012 was 47 only, the value of these transactions with foreign buyers was growing again since 2012 from 6,4∙109 to 11,6∙109 in 2016, which means more than 1 % of Spanish GDP per year (Observatorio de Vivenda y Suelo no. 21, 2017). The tax policy and communal services in both continents influence this intensity of flows. In the paper, we shall present how some factors influence the urban land rent and its capitalization in Spain and Florida, and also how fiscal policies and the communal services should be improved to increase the value of transactions or the net present value of housing rents. The main results show that the land rent and the value of transactions in the area where communal services for older persons are more developed could nearly double. In the USA they have not introduced the real estate transaction taxes while in Spain the transaction tax is determined by region and is equal to 7 % - 8 % (At Murcia region is equal to 8 %). We have found out that the proper fiscal policy enables to adapt the housing market in case of volatile economic growth. Therefore this financial flow could be more stable and the time windows in a period of economic decline and crises which influence badly on housing market can be reduced substantially. This conclusion is important also for industrial engineering sector which can contribute to better communal services by organizational schemes which reduce the prices of facilities and other services to older inhabitants at the same costs of logistics for seniors, which could contribute to the higher attractiveness of locations for new buyers and tenants.