Land use and land value theory ppt
William Alonso In location theory William Alonso (Location and Land Use: Toward a General Theory of Land Rent, 1964) built upon the Thünen model to account for intra-urban variations in land use. He attempted to apply accessibility requirements to the city centre for various types of land use (housing, commercial,…
land use and land value theory of william alonso ppt
william alonso
2. INTRODUCTION
The bid rent theory is a geographical economic theory
that refers to how the price and demand for real estate
change as the distance from the central business district
(CBD) increases.
It states that different land users will compete with one
another for land close to the city centre.
3. Retail establishments wish to maximize
their profitability, so they are much more willing to pay
more for land close to the CBD and less for land further
away from this area.
This theory is based upon the reasoning that the more
accessible an area (i.e., the greater the concentration
of customers), the more profitable.
4. Land users all compete for the most accessible land
within the CBD.
The amount they are willing to pay is called "bid
rent". The result is a pattern of concentric rings of
land use, creating the concentric zone model.
According to this theory, the poorest houses and
buildings would be on the very outskirts of the city,
as this is the only location that they can afford to
occupy.
5. As many people prefer to trade off the accessibility
of being close to the CBD and move to the edges of
a settlement, where it is possible to buy more land
for the same amount of money.
Lower-income housing trades off greater living space
for increased accessibility to employment.
6. BID RENT THEORY IN THE CENTRAL BUSINESS DISTRICT
Commerce is willing to pay the greatest rent in order
to be located in the inner core.
The inner core is very valuable for these users
because it is traditionally the most accessible location
for a large population.
This large population is essential for department
stores, which require a considerable turnover.
As a result, they are willing and able to pay a very
high land rent value.
7. They maximize the potential of their site by building many
stories.
As one travels farther from the inner core, the amount that
commerce is willing to pay declines rapidly.
Industry, however, is willing to pay to be in the outer core.
There is more land available for factories, but it still has
many of the benefits of the inner core, such as a
marketplace and good transportation linkages.
8. As one goes farther out, the land becomes less attractive
to industry because of the reducing transportation linkages
and a decreasing marketplace.
Because householders do not rely heavily on these factors
and can afford the reduced costs ,they can purchase land
here.
The farther from the inner core, the cheaper the land. This
is why inner-city areas are very densely populated while
suburbs and rural areas are more sparsely populated.
