1. Real Estate Principles, 11th Edition
By Charles F. Floyd
and Marcus T. Allen

2. Urban and Regional Economics
Chapter 14
Urban and Regional Economics

3. Determinants of a City’s Comparative Advantage
Transportation facilities
Educational facilities
Created environment
Natural resources
Climate
Labor force
Leadership

4. Economic Base Export activities Population serving activities
Agriculture, manufacturing, mining, and wholesale trade
Population serving activities
Construction, public utilities, retail trade

5. The Location of People
Cities develop in places that offer firms a competitive advantage
When jobs are plentiful other factors such as personal preferences come into play
See Close-Up “The Rise of the ‘Location Neutral’ Urban Migrant”

6. Analyzing Local Demand
Short-run demand issues
Current supply of real estate improvements
Current industrial structure
Recent changes in the local economy
Likely economic changes in the near future
Long-run demand issues
Long-run economic prospects for the local economy
National and regional trends likely to affect the local economy
Likelihood of new firms coming into the area

7. Bid-Rent Curves and Highest and Best Use
Land rent – the return that a particular parcel of land will bring in the open market
Highest and best use – the use of land that results in the highest land rent
Each parcel of land has a highest and best use

8. Bid-Rent Curves and Highest and Best Use, cont.
Bid-rent curves depict the relationship between price and distance that various user groups are willing to bid for various locations in an urban area. As the profitability of less desirable locations decreases, the prices the users are willing to pay also decrease.
See Figure 14.1 Theoretical Price-Distance Relationships

9. Urban Growth Models Concentric circle growth
Land use patterns are defined as concentric circles around a Central Business District
As growth occurs, the rings expand, with land uses changing to the new land use indicated by the expanding rings. For example, as the CBD grows, slums are converted to CBD-type uses. Also, as the area grows, higher-income housing becomes lower-income housing as it gets older and older.
See Figure 14.2 Concentric-Circle Growth

10. Urban Growth Models, cont.
Axial growth
Based on the notion that growth tends to occur along transportation routes and nodes, resulting in star-shaped cities.
See Figure 14.3 Axial Growth
Sector growth
Based on the notion that particular types of land uses tend to occur in wedge-shaped sectors extending outward from the center of a city.
See Figure 14.4 Sector Growth

11. Urban Growth Models, cont.
Multiple-nuclei growth
Based on the notion that many cities form more than one central business district, with certain land uses clustered around those points
See Figure 14.5 Multiple-Nuclei Growth

12. The Importance of Public Facilities in the Growth Process
Also known as infrastructure
Transportation improvements
See Figure 14.6 The Impact of Freeway Construction on Urban Development
Water and Sewer facilities
See Figure 14.7 The Impact of a Major Sewer Line on Urban Development
See Case Study “A Tale of Two Cities: Flint, Michigan and West Point, Georgia”

13. Dynamics of Neighborhood Change
What is a neighborhood?
Neighborhood life cycle stages
Gestation, youth, and maturity
Incipient decline
Clear decline
Accelerating decline and abandonment
Neighborhood stabilization and rehabilitation
See Case Study “Neighborhood Revitalization”

14. Urban Form: A Synthesis
Various theories of urban growth describe particular aspects of the growth process
Commercial growth
Industrial growth
Residential growth