HOW DO LAND USE, OWNERSHIP AND DEVELOPMENT SHAPE OUR LIVES AND OUR CITIES? Lend and’ he City presents a broad but concise analysis of innd-usepatrns and proce in utban ares inthe deve coped word. In the ‘rapidly. changing sphere of tan {Relopment land is shown ro provide the bse morphoog fal wtuctute of the chy, 10 be clotely connected wih avironmentil uertions, to be a sours of sconemic and foci power and to be he key planning. or he ie ime the vel significance oflnd ute and onn- trip a caumined in an urten geographic end planning Contec Focang on pracal sad applied andure ince trample are drawn ftom Europe, North Americ, Auscia snd Jean Philp Kiel i Head of the Department of Geography and Diner ofthe Cee for Regional Information and Research a ele Universi. on ge ‘Urban studies/planning/geography aoq711Now Lo 11. New Fewer Lane London ECAP 4EE 29 West 35th Street 9 Fraog1stoa 7827 ‘New York NY 10001 ‘LAND and the CITY { PATTERNS AND PROCESSES OF URBAN CHANGE Philip Kivell eeLAND AND THE CITY and development companies, together wid the relative secusiy of property fan investment he iporance of cacrenge vale sted tobe high recent years. Usban er are commodities which are traded and where the Value can be gudely determined sing formulae Hke that suggesed by ‘Wendt (1957): © Land valve — (aggregate gross revenues) sinus (expected costs) Capialisation rae _Amongat the factors which allet the revene are the size and activity let! of the marke, income spent on service, the competitive pull of the particular turban market and Ukely public investment in improvements. Costs are allecred by local taxes, operating revenue, interest rates and depreciation. Capitalisation is affected by interest rates, allowances for risk and expect ations of capital gain. In Los Angeles, Titman (1985) examined a number of ‘vacant and undeveloped plots and concluded that speculative holding for ‘more valuable development in the future wat the Ley to the pattern Similaty, in a simple model, Capozza and Helsley (1989) suggested that 2 tgromth premiut, in the frm of expected future ren increases may account for as much as a ball ofthe average price of lend in a rapidly growing city ‘This brings us othe supply side of the market. Supply factors Given the asamed inelasticity of supply and the other factors listed atthe beginning of the chapter, itis perhaps not surprising that che supply side of the urban land market has been neglected. Certainly, we can accept thatthe supply side may be seriously constrained, but no longer can ibe argued that itis fixed in amount and incurs no supply or production costs “The suggestion thatthe supply sde of the market needs tobe considered more actively has been gaining strength in recent years (Evans (983; Wilt- shaw 1985; Goodchild and Manton 1988). The argument can be surmmar ised as follows, Thice features need to be considered. Firs, planoing has an ‘lect upon supply throagh the way in which decisions are taken to permit or deny development, Second, there are physial constraints in the form of land quality or the presence of a major barier which may limit urban activity. Ina study of forty-five cities inthe USA, Rose (1989) concluded that planning restrictions and physical estrictions(especlallystrezches of water) ‘counted for 40 per cent of the observed diferences in land prices. Third, land more elaborately, are the behavioural choies made by land owners. As will be seen in Chapters 6 and 7, the silingness of land overs to be involed in the development proces isa powerful influence upon the subse: ‘quent course of events. ‘The strongest interpretation of the land owner's behaviour involves monopoly power, because each site is unique and the land owner ean determine the price by withholding i fom sale (Neutze 6 URBAN LAND ALLOCATION 1973; Drewett 1973), This notion of monopoly is a powerful one, widely discussed by Manast commentators, but the practical reality ofthe urban land marke is that although tome sites may attract a price premiutn, very Tew achieve monopoly. Tn arguing that land does have a supply price, some account must be taken of how thsisset. The land owners price may be bazed upon compar- sons with other nearby sites or the cost of replacing his land with an alternar tive site, but it may also involve an erroneous reading of the market, ‘uncertainty about future price movements, or simply greed (Pearce et al 1078). In considering when, oF whether, to sel, the vendor also takes into account the cost of moving, the loss of amenity and a range of other non. Financial benefits atached 1 land ownership (Popper 1978; Neutze 1987), All of this means that the supply price must exceed the existing value ifthe fowner is t0 be induced 10 sll. Hese selling must be distinguished from renting because the former is a permanent transaction whereas the terms of renting can be varied or rescinded. The behaviour of land owners, or suppliers, n aggregate determines the overall supply of land, and in certain circumstances i is porible to ate that thie ie fa from inelaie. The total famount of land coming on to the market can vary substantially over short periods asthe eyele market for housing land in Britain shows. For example, Jn 1970 land for 70,000 houses was sod, But in 1973, when land values had tuple, land for 170,000 houses was supplied (Neuburger and Nichol 1976), Finally, the supply price may alo be alflected by Toca tax eanlitions, with sppliers adding development taxes to thet sling prices, and by the costs of learance and reclamation involved in bringing derelict lan into & maret- able sate, Tn conclusion, a mixture of interacting influences can be seen to deter mine the way ia which the market allocates urban land. Neoclassical eco omic views have emphasised the profitability and wily of competing uses, as meciated through accessibility and rent levels. Despite tis oversimpliicn: tion ofa very complex process, thas tended to dominate the derivation af models of urban land allocation and use Inthe next section some of these ‘models will be examined in more detail MODELS OF URBAN LAND USE AND LAND ALLOCATION Many models of urban land have been developed by economist, geogra= pphers and others anda large proportion of them ean be described at bid-ent ‘models, These assume tha land using activities have dillerent needs to locate close tothe centre ofthe city and wil bid for land accordingly. This results in a gradient of intensities of land uses and land prices which declines outwards fear the centre in a more or less predictable manner. All activities are thus ‘optimally located, such that uit, or prof, is maximised. The provenanceLAND AND THE CITY of mos of these model can be mace tothe work on agrcltral land published by Von Thunen in 126 akhough ts Hurd (09) who anally fren credit for applying to urban areas. “The Frey deelopment these mes canbe seen through the works of Isard (199, Beckman 1957}, Wingo (96), Mons (1960, Muth (90), Mis 1972) and Migs (1981). 1hey hve been well summaroed by Balchin are Kiee (197) Halle (1978) and Haden and Rind (180, a bret utine wil sufice beret should also be noted that, more receny, Fj (0985 has tempted to extend them beyond the ited explanation of po {vin theory into normative theory with the ientcaton of eet spt Sctres aod means of achieving them. In essence, the bidrent formulations rest spon the asrompton tht iter ates wl have biden carves which vary inom atoning © ther need tobe atthe entre of hey. This in tur, depends pon the nature ofthe atts, te bly o ake advantage of highly priced central Stes and thi seni to transport cos A numberof commer nc ites fr example, have very spec abour needs, eusorner requirements snlinkages with other actin. lof these cn, corel, bot besa fed at the centre where transport faces maxis labour vay, canoer low and proximate kage. Thus they wl be prepared to po high prices and wl have a steep rent gradi A rumber of indus et ‘tes ave ond had even more only inthe past) «ned tobe closet the Cente for reasons of labour avlaliy, trantportserces and makeing services, utr ned ies than that commer ses aa they are let sensve small variations in acces, therefore thei Tent getcert lest seep and they cannot crnpete succesful for the very cena see eset activins are normally the large wero and inthe iy. Tey ‘ay dese sly centea locton (although suburban ques ae eens ingly prefered, but they cannot derive suit lity or pot to oubid commerce and induty Tn ele, they eromea cesta use consigned fo the lowes level the biderent curve wt lation fares from te centre “This theory provides the rationale forthe arrangement of land ws and ‘aloes inate in Figure 2 An oeal lan ale sure can be een in Figure 24, nd ithe diagram is rotated sbout ts vericl ais at the cy centre, a broadly concent n- ‘ation ofan uses achieved. The oveiding nt on ths hat and seb teen to dtenine land value. Point A mans he digance om the ene vere the decline in interest frm commer ates fe sch that indus ‘lus can obi them ad ths become the donnant ati. tpt B, slay vevdential vse compete sacral with nduty, Fro the entre 1o point A commerce dominates, but indy, ands twer lve ‘en hosing, would be subordinate set Fora acts there wl bem tude Between the high ot of eal area land andthe high cons ftansporincared by lcating ober tt, bat 8 Distance —— ‘ig 2 Urban lool wes and the bide model the elects of this may be more apparent for residential uses, oF for individual households within the residential sector, for whom the uity of central location islower ~ Figure 22. “These notions of bid-rent theory, and the pattem of land use which is assumed to result, provide degree of explanation for one of the best known models of urban structure, that of EW. Burgess (1923). Ie must however be stressed that Burgess did not use reat theory as such. He was sociologist find his model was derived from empirical observations of the way in which the city of Chicago had developed. Ar such, it isa hybrid of idealised land lute patterns and urban social tructure with a strong emphasis upon reside tial areas. The model is commonly represented as « purely concentric 20 pation of activities, but itis important to remember that, ae orginally developed from Chicago it had significant additions inthe form of special- ised sectors ~ Figure 23, “The importance ofa sectoral frm of development was taken up by Hoyt (1938) in hie study ofresiesil reat levels in large number of American ties, including Chicago. Although there are obvious dilerence between these two models there are leo some similarities ~ Figure 23, The main dliference is that Hoyt considered direction, as well as distance, from the CBD to be important in determining land use. The arrangement of the sectors was such that high income areas were protected from low income “isries and from industry by bufler zones of middle income housing. The strength of the sectoral patter which emerges should not be allowed to »Cost ot tend ‘Sco Distance from centre —>. ‘gure 22 Vasatin land ad anspor cot with distance fom ty cent isguise the fet that within the sectors, Hoyt clearly identified concentric ‘zones of dilleretial rent and a tendency forthe mort fashionable residential areas to migrate outwards from the centre along specific sectors. The processes dil, in that Burges: war largely concerned with social factors such as ecological competition and migration, whereas Hoyt concentrated ‘upon amenity value and filtering, but there isa case for suggesting that Hoyr’s model should be considered at tenement ofthat of Burgess rather than something which sties off i a totally diferent direction. In seeking general applicability, Hoy's model isto be preferred to that of Burgess because it is more firmly based in empirical data, being a synthesis of wenty- five cities, and because it goes further towards acknowledging thatthe CBD is not the only commercial focus ofthe city. This latter pot i important Decause some ofthe rationale for kentfying setars was the growing impor ance of motor wansport which was creating subsidiary commercial nodes, ten alongside majo radial rads, in the interwar period, In a thint major modeling exercise, Haris and Ullman (1945) ook Hoyt’ subtle recogitin thatthe CBD was not the only focus of activity, and ‘made it explicit in their mubiple nueeii model ~ Figure 23. Again, the ‘model isto some extent esolutonsry in that it incorporates elements of Burgess and Hoyt but i is more flexible chan ether. Esserially, it implies thatthe city has 2 cellular structure within which a number of specialised areas develop. Some of these may be highly nucleated, such as ruburban shopping centres, but others may be quite large districts dominated by a Single land use such as industry or upper-class hovsing, In relaxing the dominance ofa single centre, andthe assumptions of geneal accessibility 10 ‘the core, the multiple mcleii model recognises the interaction of number of| locational factors. Fist, it gives some weight to topographical and historical features i the origins of the growth ofthe city, for example, in the_absorp- tion of minor setlements. Second, it recognises that diferent levels of m0 ign ncame Concent one mec ot BW. Burgess Secor mod et Hort igh nent Matte ucirmede ot Har & Uiman | Mol furan suena — Mann “ves Origa ming cd on Bayes Hoyt, Hara Ulan, Mane Fie 2.3 Dingramsnati del of urban strvcare retailing do not all seek a central ste sine preferring suburban locations Gls hee mak Thi allow rhe aggameraon cmos and both the negative and positive externalities which cause cera firms or households to cluster together, These three models have become so well tablished in the Itereture on urban structure that they ate normally refered to a the classical models’. They ae all, quit clearly, North Amer- a‘can in erigin but an attempt to refine them forthe British context has been ‘made by Mann (1965). His diagrammatic model ~ Figure 23 ~ draws mest heavily upon the concentric zone and sector models, but i makes pasting reference to sepgrae and more specialised areas, Importantly, i alza makes allowance for (public sector intervention in the form of local authority Thowsing. Naturally, models which have been around for such 2 long time will have attracted a wide measure of criticism (Carter 1976; Hallet 1978; Hudson and Rhind 1980), nd the evolution of urban land use in the past three decades highlights some oftheir deficiencies, Some ofthese critics are valid, but in a sense unfair. For example, both Burgess and Hoyt were concerned with the rapidly growing American city of the fist third ofthe twentieth century, to apply their models outside of this geographical and historical sewing is misleading. Burges, in particular, claimed no wide applicability for his model. Some attempt to deal wit erticims of the exer models can be een in the development ofthe later one, notably the attempt to move away from the assumption ofa single, ovevehelmingly dominant central area. Similarly there isthe question of public intervention in the ‘urban structure. Ar the ime when Burgess was triting, the structure ofthe “American city was almost wholly determined by market forces, Subse ‘quently, and especially in European cies, siate intervention through planning regulations, transport policy and the provision of public sector fc lines has prefoundly influenced urban strscture. All of these madels then have severe limitations. Burgess and Hoyt, in particule, simply deseribed the patterns which they saw; they did not provide quantifiable models and they were not very explicit in their analysis of process. For all of dei shor: comings, however, the models have sn enduring quality and they have ‘undoubtedly been fruit in shaping our understanding of patterns of urban land ute and structure, "These classical models have been attempts in varying degrees to provide ‘comprehensive staterentsof urban structure, Ifwe retuen now tothe bid-ent ‘models, iis clear that they mainly deal with more partial views, Residential land use hasbeen their principal focus, and a number have looked at retaling patterns, but ew have examined manufacturing or other activites. Putin the various urban subsystems together has generally not been attempted exceptin ‘he simulation models such as tha applied by Lowry (1964) to Pusbursh, ‘The seminal work of Wingo (196), Alonso (1964) and Math (1969) looked ‘mainly at residential choice and this har recently been extended by Thrall (1987) na consumption theory of land rent. He made the usual asammptions| of bid-ent model, including a city popalated by identical households, on aa isotropic plain with all employment at the centre. Households ean decide About the consumption of two goods: land and a composite ofall other foods. He argued that because of higher transport cuss atthe periphery, Aisposable incomes are lower, bu to compensate for this land coms ae lower 2 URHAN LAND ALLOCATION Regional Level HEB ora Di conmnty Meloutoad Distance ‘Community Levet Distance Neighbourhood Level Neirtoutond Distance Figune24 The internal score of regional, century and neiehbourhoed ee “sopping center 2Nuclested Charectroticn "Example Custare A fees poral coros Noten shops Communi ean ©. Gitahope Neighboumood soneor Bond shops Exampie Custos Evang 2 Arena fisbon F Gales 4 Sthupanitton 6 Garages ‘Special Ares Charatestion ‘shop Typee xampla Ch Tigh aosy Emenaemerss 2. Mou qual nae 3 town Forse THE COMPLEX MODEL Pique 25 Struct model of Conta Area Core Real Fes URBAN LAND ALLOCATION and people consume more of it At the centre higher disposable incomes allo families to consume more composite goods. Some daubts mst be shed upon the reality ofthis because wealthy suaburbanites and commutes donot have wo trade off consumption of land against composite goods or transport ‘oss; they can alford more ofl ‘The Key concepts ofthe bid-rent model, i, land values and secesibility to the centre, have been applied in a variety of Greumstanees to the more specialised study of urban retailing, especialy with respect othe structure of the urban core. The work of Gamer (1966) and Bemy (1967) drew attention to the connection between different levels ofthe shopping hierarchy and distance from the core such that a concentrie arrangement of retailing land tases curs ~ Figure 24. Theda wns further developed by Daves (1972) for the city of Coventry and here we see (Figure 2.5) once again the combination of seciors and concentric rings. A detailed connection between shop types land rents and distance from the centre, in the mainstream tradition of bid rent theory has been outlined by Scot (1970) (Figure 26) Implicit in all of these mode's of urban land use isthe important role of transport, and itis necessary to consider two aspects. Fis, some reference must be made to the lage scale simulation models of urban land use and transport which were developed inthe united States frm 1940 onwards, even ‘hough they are not primarily economic models. Second, iis ueful look at more detailed empirical examinations ofthe connection between transport snd lend cost. ‘The development of transport modelling created some ofthe prerequisices for land use modeling, (Harris 1985) and a number of massive sudies of Tand use and transport have been undertaken, e.the Penn-Jerty Stidy and the Chicago Area Transport Study. Most ofthese medels can be eate gorised as either 1 non optimum-seeking models of disaggregated land use, eg, Lowry (1968); or, 2 optimurisecking models, oten ofa inear programme ype, eg Herbert and Stevens (1960), arly models took transport cons as given, but more recent ones take account of congestion, which means that travel cost are not uniform. A ‘tefl review of many of these model types wat provided by Berechman and Gordon (1986). Ie is worth stressing that most ofthese models ate ‘non- economic’ simulation models, i. they use rules taken from observed sai tical regularities in tavel and the location of activities, rather than from ‘economic forces such as land rents and consumer preferences. Some attempt to reconcile the O40 categories has been made by Anas (1986). The inte- tration of transport and land use models was explored by Putman (1983) ‘who emphasized both the importance of transport for land use and the complexity of the elationship. %Kilometer Rent per square foot Distance trom highest land values See: Sa 170, Kalan Stain Dn Figure 26 Rent gradient in an unplanned shopping centre Relatively few studies have empivcally tested the relationship between land use and reanspor, but there are number which have shown measur able connections berween tansport changes and land prices. In Britain, for ‘example, improvements i urban rail services were shown to have increased house prices in Glasgow and London (Wacher 1971), and in the Tyne and Wear area (Picket and Perrtt 1984). Similar changes were reported follow ing the opening of the Spadina subway line in Toronto (Bajc 1983). In ‘Australia, property prices responded 0 the increase in pesrol prices in 1978 (rans and Beed 1986). Up until 1978, the value of houses in the outer suburbs of Melbourne increased more rapidly than those in the inner Patoet 17a pene suburbs ~ Figure 2.7 ~ inline with experience in most western cites From 1978 to 1981 however there was a reversal ofthis pattem ~ Figure 28, Values in the inner suburbs rose by 30-50 per cen, whereas those in the outer suburbs remained static. [n dhe USA the increases in il prices becween 1973 and 1979 also caused some adjustments, in that there was a trend towards smaller eats and a continued movement of people and industry towards the suburbs in onde to decrease the journey to work distances. In Japan, on the ‘other hand, it appears that ising transport costs have ha lite ellect upon Soc Bra a Bed 986 turban structure. Rapidly ‘ring real incomes and. the willingness of ‘employers to subsidise commuting costs mean that urban residents can, to some extent, shrug off ising energy costs. Industry has aot moved out ofthe cites as much as it has elsewhere because of is continuing stong links to port Flies (Getis and Ishimizn 1986). % Figwe 27 Changer in house pies, Melbourne, 170-8 "2180 peo 29 5200