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Geology/Planning 379 "Urban Growth & Development" Lecture 7: Urban Rent and Land Use Theory von Thünen\'s Agricultural Land Use Theory The Concept of "Financial" or "Offer" Rent Graphing Bid Rent Lines The Negative Exponential Rent Gradient Urban Land Uses and Bid Rents Amenity versus Location Rent Reading: Required: Textbook, Ch. 6, pp. 147-148 Optional: Cadwallader PROJECT 1 DUE TUESDAY 12:30 "It has all the effect whether one sees murkiness through the light or splendor through the shadows." – David Lindsay

von Thünen\'s Agricultural Land Use Theory Modern urban rent hypothesis in light of: agrarian rent hypothesis as defined by Johann Heinrich von Thünen His 1826 book: The Isolated State Basic thought: Agricultural uses adjust to unsurprising examples around urban communities, which are the business sectors for the homestead merchandise Those products with most prominent request and having the most elevated transport expenses ought to be created nearest to the city

von Thünen\'s Agricultural Land Use Theory Where does drain originate from? Main three dairy states: 1. Wisconsin 2. California 3. New York Why does drain have high transport costs? " Perishability"

Definition: financial lease or offer rent The fiscal return an agriculturist can get for growing a specific harvest on a unit of area after every one of the expenses of generation (counting transportation to the business sector) are considered.

The Concept of "Monetary" or "Offer" Rent Farmers in charge of pulling produce to market so financial rent higher for area nearer to the city lower for area more distant Economic rent: most elevated value agriculturist could pay for area and equal the initial investment growing a specific harvest: the greatest rent that could be paid to grow a product So it is infrequently called: offer lease The area might possibly be put into the utilization relying upon whether another utilization can offer more for the bundle of area. Broad agribusiness (case photograph: Wheat cultivating) Intensive horticulture (case photograph: Rice paddies)

Assume transporting corn costs 50 pennies/mile Graphing Bid Rent Lines Assume tomato transport costs $1/mile Let\'s diagram some speculative offer rents! Corn : P C = Market Price = $100 (for sum developed on a unit of area – e.g., one section of land) S C = "Spatially Invariant" Costs = $50 (for seed, manure, work, collecting… ) R i (X) Bid Rent What\'s the Bid Rent right by the Market? R c (x) = P C - S C = 100 - 50 = $50 Tomatoes outbid Corn What\'s the Bid Rent 10 miles from Market? How far out will it be the place Bid Rent is equivalent to zero? 100 - 50 – (10 x .50) = $45 $60 We can now attract the Bid Rent Line for Corn… 100 - 50 - .50 X max = $0 50 = .50 X max $40 Point of Intersection X max = 100 miles Corn outbids Tomatoes: P T = Mkt Price = $150 S T = S.I. Costs = $75 $20 X, Dist from Mkt (Miles) $0 Tomato Land Corn Land 0 10 20 30 40 50 60 70 80 90 100

The Predicted Land Use Pattern and the Negative Exponential Rent Gradient What might an area use guide of our two-crop case resemble? However, consider the possibility that there are other contending land employments. Market City Tomatoes Corn Dairy Margin of Cultivation Grapes Grazing "Marlboro Country"

The Predicted Land Use Pattern and the Negative Exponential Rent Gradient With more contending area utilizes, what does the genuine general rent angle resemble? Rent angle demonstrates the declining estimation of area as you leave from the city; area being utilized for the "most astounding and best utilize" It is the upper envelope of the offer rent lines for all contending land utilizes The inclination goes up against a negative exponential structure: diminishing with expanding separation, however with a diminishing slant. In 3-D: It looks sort of like a one-post bazaar tent! R i (X) R * (X) = R 0 e - bX X

Urban Land Uses and Bid Rents Urban interpretation of the definition: "Financial" or "Offer" Rent The money related return an engineer can get for building up a specific area use (e.g., loft structures, office complex, strip mall, single-family homes) on a unit of area after every one of the expenses of advancement are considered and including the ability of leaseholders/purchasers to pay for the level of availability gave by the area Bid Rent Office Buildings Multi-family Residential (Apartments) Single-family Residential Agriculture Edge of the Urbanized Area X (Dist from CBD Center)

Urban Land Uses and Bid Rents The fundamental von Thünen-style urban financial aspects model portrays a monocentric city, for example, amid the omnibus, horsecar, and streetcar rural areas periods Urban regions now polycentric: separation to numerous focuses matters What might a polycentric offer rent land use map resemble?

Amenity versus Location Rent How are leases really decided in \'this present reality\'? We should take the instance of y\'all\'s slumlords (or slumladies) How would they approach making sense of the amount they can gouge you for? Rent = \'Area Rent\' + \'Enhancement Rent\' Location Rent: Based on openness and free market activity considers How do free market activity fit into the fundamental offer rent system? Convenience Rent: Amenities might be site-particular or externalities; externalities can be certain or negative

Practice Bid-Rent Problem These are the offered rent capacities for single-family private area use, R S (x), and multi-family private area use, R M (x), where x is the separation from the focal point of the CBD in kilometers: R S (x) = 20,000 – 2,000 x R M (x) = 160,000 – 30,000 x Where would we hope to discover the limit amongst multi-and single-family private area use? (An) At x = 0 km (D) At x = 5.333 km (B) At x = 2 km (E) At x = 10 km (C) At x = 5 km Solution: Set R S (x) = R M (x) and settle for x… 20,000 – 2,000 x = 160,000 – 30,000 x 28,000 x = 140,000 x = 140,000/28,000 >>>> x = 5 km

POP QUIZ Name ____________________ These are offered rent capacities for single-family private area use R S (x) and multi-family private area use R M (x) where x is the separation from the focal point of the CBD in kilometers: R S (x) = 20,000 – 2,000 x R M (x) = 160,000 – 30,000 x Suppose Agricultural area use can pay $2000 per unit of area paying little respect to how far out it is from the middle : R A (x) = 2,000 Find the separation x max where we would hope to locate the external edge of the urbanized zone. Demonstrate your work!

QUIZ SOLUTION. These are offered rent capacities for single-family private area use R S (x) and multi-family private area use R M (x) where x is the separation from the focal point of the CBD in kilometers: R S (x) = 20,000 – 2,000 x R M (x) = 160,000 – 30,000 x Suppose Agricultural area use can pay $2000 per unit of area paying little mind to how far out it is from the inside : R A (x) = 2,000 Find the separation x max where we would hope to locate the external edge of the urbanized zone. Demonstrate your work! R S (x) = R A (x) 20,000 – 2,000 x max = 2,000 18,000 = 2,000 x max x max = 18,000/2,000 = 9 km 150,000 100,000 50,000 0 9 0 2 4 6 8 10