HOUSING

Oleh :
Dr. Ir. Firmansyah, MT

Jurusan Teknik Planologi

Fakultas Teknik
Universitas Pasundan
Bandung
2009
1. Yeates/Garner, The North American City,
Ch.11 : Housing and Residential Location
2. Evans, A.W, 1987. Urban Economic An Introduction,
Ch.2 : Residential Location
3. Hartshon, Truman A. 1992. Intrepreting the City : An Urban Geography.
Ch. 12 : Housing and Neighborhoods
 ASPATIAL CONSIDERATION

→ housing is an extremely important element of urban

and human life because it is the situation which most
people spend the largest proportion of their day and
which consumes the largest proportion of their total
income.
→ The level of ownership, of course, depends on the
price of homes and current interest rates, and the
general level of house prices depends on the factors
influencing the demand and supply for Housing.
Source : Yeates/Garner, The North American City, Ch.11, P.283-284
 The Demand for Housing
✓ the rate of total family formation is a good indicator of
the demand for housing
✓ these components can be enumerated concisely as the :
1. demographic structure of the population
2. propensity for “undoubling”
3. change in family income
4. number and length of vacancies
5. replacement demand
6. availability of credit
Source : Yeates/Garner, The North American City, Ch.11, P. 284
 The Supply for Housing
 A housing unit is defined as a dwelling that has a
separate entry or an individual entry off a hallway
or corridor that does not pass through another
dwelling. Given this broad definition, it is not
surprising that the supply of housing can be
influenced by many factors, some of which have
been mentioned with respect to housing demand
 The supply of housing is determined by the volume
of the existing stock plus the rate of new
construction
Source : Yeates/Garner, The North American City, Ch.11, P. 285
 SPATIAL CONSIDERATIONS

In this section we will examine the way in which

housing and people are located in the city from two
complementary perspective. The first perspective
assumes that people do have choices with respect to
residential location in a free market context. The
second perspective, in effect, relaxes the assumption of
the free market and examines the way in which
residential location choices are restricted by a number
of factors arising out of the market system, and
governmental activity that is ostensibly designed to
make the market more effective and more responsive
 Market-Oriented Perspectives
One of the most important constraints is income, for the
residential location of individuals is governed by what they
can afford and the trade-offs they are willing to make.

 The Employment-Income Perspective

 The Ecological Perspective
 Residential Mobility and Stress
 Filtering

Source : Yeates/Garner, The North American City, Ch.11, P. 288-300

THE FILTER DOWN THEORY
 Developed inductively by E.W. Burgess in the early 1920s to explain
the pattern of residential location in Chicago, he observed that in
general the higher the income of any household the further it lived
from the center of Chicago.
 Because of the rapid development of Chicago in the nineteenth
century, it was also true that the newer the housing the further from
the centre it was located and therefore that the highest-income
households lived in the newest housing furthest from the centre and
the poorest households lived in the oldest housing nearest the
centre.
 As the city expanded so the richest households moved on to the
newest houses on the edge of the city, leaving their former housing
to be occupied by slightly lower-income households – and so on until
at the centre of the city the very oldest housing was vacated by the
poorest households as they moved outward into very slightly newer
housing and their former housing was demolished and replaced by
the offices and shops of the expanding Central Business District
Source : Evans, A.W, 1987. Urban Economic An Introduction, p. 15-16
 It has been described as social ecology because its
concepts were based on the ecological concepts of
invasion and succession
 To geographers it has been the “concentric zone
theory” because Burgess represented the ‘ideal
construction of the tendencies of any town or city to
expand radially from its central business district’ as
consisting of a series of concentric zones
 A variant of historical theory → Hoyt (1939) → a high
income sector would become established in a city for
topographical, sociological, or historical reasons, for
example, along a lake front or along a fast transport
route.
 Filtering down is optimal was the principle on which
the American policy of urban renewal was based in the
1950s and 1960s

Source : Evans, A.W, 1987. Urban Economic An Introduction, p. 16-17

Residential Location
Evans, A.W, 1987. Urban Economic An Introduction

Trade off Theory

 modern urban economics has largely sprung from a theory of residential
location developed in the late 1950s. This theory has come to be called the
‘trade off’ theory of residential location because it represents each
household as choosing its location by ‘trading off’ housing costs, which
tend to distance from the city centre, against transport cost, which tend to
increase with distance from the centre.

 before the ‘trade off’ theory was developed, the explanation of residential
location patterns was based on what has since become known as the ’filter
down’ or ‘historical’ theory which we consider first. This was based on the
observation that in general the newest housing tended to be occupied by
the wealthiest households, whilst older housing ‘filtered down’ to poorer
households; the pattern of residential location is, therefore, dependent on
the historical pattern of development in the city, since it is explained in
terms of the age and quality of housing.
▪ Trade off theory is methodologically a better theory
than the other in that it explains more, particularly the
pattern of land values, but its supremacy has had the
effect of emphasizing the demand side, household
preferences for different locations, and playing down
the importance of the supply side, the historical
pattern of development

▪ both supply and demand must be relevant to the

determination of patterns of location and will
eventually be incorporated into the theory of
residential location

▪ high income households are more likely to occupy

lower –density areas and an area is more likely to be
developed at lower density if it is controlled by a single
land owner
Source : Evans, A.W, 1987. Urban Economic An Introduction, p. 15
 THE TRADE OFF THEORY
→ Two authors who laid the foundations of the theory, Wingo (1961)
and Alonso (1964a) and two later developers of the theory Muth
(1969) and Evans (1973a), only one, Muth, was primarily interested
in housing as such.
→ Whilst the filter down theory assumed that house hold location
depended on housing conditions, in the trade off theory it was
assumed that housing condition in any area would depend on, or
adapt to, the kind of households which located there. Whilst the
former was, in economic terms, a supply-side theory, the latter
was clearly a demand-side theory.
→ The basic assumptions of the trade off theory are as follows :
1. There is a large city with a single central business district to
which all workers commute.
2. It is located on a flat plain with no topographical features.
3. The transport system carries commuters from all the suburbs to
the centre with equal efficiency
4. There are no externalities of any kind and housing can be
cosdessily adapted
Source : Evans, A.W, 1987. Urban Economic An Introduction, p. 18
▪ Since everything else has been assumed away the only
factor which the household has to consider in choosing its
location is the cost of the journey to work. However, the
attempt to minimize these costs results in a high demand
for inner-city locations and this causes the cost of land and
housing to be higher in the inner city than in the suburbs.

▪ How is the pattern of location determined? Each household

has three factors to consider in choosing its location :
1. the amount of space that it requires
2. there are the two components of transport cost, the direct
cost of travel, i.e. the fare paid to the transport company
or the running costs of a private vehicle, and the
opportunity cost of the time spent travelling.

Source : Evans, A.W, 1987. Urban Economic An Introduction, p. 19

▪ If the household’s demand for space remains
constant whilst the number of journeys to work
increases the household will find that it could save
money by moving closer to the centre. Thus one
would expect households in which a high proportion
worked to be located close to the centre, whilst
households in which, say, only one person worked
would be located further out.

▪ As a household’s income increases its demand for

space increases which should lead it to locate further
out from the centre, and the value of travelling time
increases which should lead it to locate nearer the
centre. Which of these two forces dominates
depends on the exact relationship between the
increase in the demand for space and the increase in
income.
Source : Evans, A.W, 1987. Urban Economic An Introduction, p. 19
 Romanos, Michael C. 1976. Residential Spatial Structure, P. 70

 Two axioms constitute of the model :

1. Every household chooses its residential location so as to
maximize the amount of living space that it can occupy its
housing expenditure
2. The average household expenditure on residence and
commuting is a well-defined function of income; the
commuting costs function being a linear one
 The theorem states that land rent and residential density at
each location are determined so that higher income groups
tend to locate further from the center of the city, the sole
location of employment
 poor families reside in the central city where land generally
commands higher prices, while the wealthier families settle in
the city periphery on less expensive land
Romanos, Michael C. 1976. Residential Spatial Structure, P. 70