Urban Economy: Real Estate Economics and Public Policy

329 Pages·2021·6.343 MB·English

by  Colin Jones

Urban Economy
Urban Economy: Real Estate Economics and Public Policy analyses urban economic
change and public policy in a more practical way than a typical urban economics
book. The book has a distinctive framework that considers the underlying reasons,
and the consequences of, urban change for real estate investors and policy makers.
Part 1 covers the basics of urban economics and real estate markets, including hous-
ing and commercial. Part 2 looks at the reformulation of urban systems and the rea-
sons why. It then considers the consequences for real estate markets and investment
of decentralisation forces and emerging technology. The issues that arise for urban
public policy are then discussed, notably transport policies, public finance and sus-
tainability, before a chapter examining housing neighbourhood and housing market
dynamics and a shift from spatial change to regeneration. Part 3 reverses the dominant
perspective of Part 2 to assess the effectiveness of how property-led policies can posi-
tively influence a local economy and urban regeneration. The chapters consider several
important policy questions and constraints and draw on a number of case studies that
illustrate the benefits and drawbacks.
The book includes chapter objectives, self-assessment questions, chapter summa-
ries, learning outcomes, case studies, global data and statistics and is a new textbook
for core courses in urban economics and real estate economics on global Real Estate,
Planning and related degree courses.
Colin Jones is an urban economist who has been a professor at Heriot-Watt Univer-
sity since 1998. He formerly worked at the Universities of Manchester, Glasgow and
the West of Scotland. His research interests span commercial, industrial and housing
market economics, investment and policy, the macroeconomy and local economic de-
velopment. Colin has edited or authored eight books, published more than seventy pa-
pers in academic journals and has taught urban economics and real estate investment
at undergraduate and postgraduate levels for more than 40 years.

Urban Economy
Real Estate Economics and Public Policy
Colin Jones
First published 2022
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
605 Third Avenue, New York, NY 10158
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2022 Colin Jones
The right of Colin Jones to be identified as author of this work has been asserted
by him in accordance with sections 77 and 78 of the Copyright, Designs and
Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or
utilised in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in any
information storage or retrieval system, without permission in writing from the
publishers.
Trademark notice: Product or corporate names may be trademarks or registered
trademarks, and are used only for identification and explanation without intent
to infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Jones, Colin, 1949 January 13– author.
Title: Urban economy : real estate economics and public policy / Colin Jones.
Description: Abingdon, Oxon ; New York, NY : Routledge, [2022] |
Includes bibliographical references and index.
Subjects: LCSH: Real estate development—Government policy—Great Britain. |
Real estate development—Government policy—United States. |
Urbanization—Great Britain. | Urbanization—United States.
Classification: LCC HD593 .J65 2022 (print) |
LCC HD593 (ebook) | DDC 307.76/0941—dc23
LC record available at https://lccn.loc.gov/2021020265
LC ebook record available at https://lccn.loc.gov/2021020266
ISBN: 978-0-367-46197-3 (hbk)
ISBN: 978-0-367-46194-2 (pbk)
ISBN: 978-1-003-02751-5 (ebk)
DOI: 10.1201/9781003027515
Typeset in Times New Roman
by codeMantra
Access the Support Material: www.routledge.com/9780367461942
Contents
Preface xi
1 Introduction 1
PART I
Spatial pattern of economic activity 7
2 Location of economic activity 9
Objectives 9
Definitions of a city 9
Location of cities 11
Industrial location theory 13
Summary 16
Learning outcomes 17
3 Spatial agglomeration 18
Objectives 18
Role of agglomeration economies 18
Types of agglomeration economies for firms 19
Urban agglomeration benefits for households 22
Why cities grow? 23
The scale of urban development 24
Summary 25
Learning outcomes 27
4 Spatial structure of towns and cities 28
Objectives 28
Agricultural land rent determination 28
Intra-urban patterns of land use and rents 30
Hierarchical nature of services and retail centres and subcentres 36
Summary 39
Learning outcomes 41
vi Contents
5 Spatial structure of the housing market 42
Objectives 42
Access-space model of the urban housing market 42
Spatial patterns of house prices and incomes within cities 43
Neighbourhood submarkets 45
Urban functional areas 45
Summary 46
Learning outcomes 47
6 Planning and the land market 49
Objectives 49
Functions of planning 49
Real estate market implications 53
Distributional implications 55
Land value capture 55
Summary 59
Learning outcomes 60
7 Urban housing markets 62
Objectives 62
Housing tenure 62
Choice and constraint: household movement in the housing market 64
Affordability and affordable housing 66
Financial constraints 69
Migration and spatial house price trends 71
Summary 72
Learning outcomes 75
8 Urban commercial real estate markets 77
Objectives 77
Tenure 77
Occupation demand 78
Investment 79
Supply constraints 80
Development activity 81
Real estate cycles 83
Summary 85
Learning outcomes 86
PART II
Spatial change and public policy 89
9 Growth, decline and revival of cities 91
Objectives 91
Industrialisation 91
Deindustrialisation 92
Contents vii
Manufacturing decentralisation 93
Decongestion 94
Suburbanisation 95
Growth of services 96
Inner-city donut 97
Re-urbanisation and revival 98
Summary 99
Learning outcomes 101
10 Explaining intra-urban economic change 103
Objectives 103
Intra-/interurban transport costs 103
Changing real incomes 105
Changing commercial rent gradients 106
Changing house price gradient 109
Re-urbanisation and the changing donut 110
Summary 111
Learning outcomes 113
11 The changing urban system 116
Objectives 116
Stages model of urban change 116
Stage 1 Pre-urban or pre-modern stage 117
Stage 2 Urban specialisation stage 117
Stage 3 Urban transformation stage 118
Stage 4 Urban dispersal stage 118
Facets of urban dispersal 119
Individual influences on localities 122
Regional growth poles 123
Summary 125
Learning outcomes 127
12 Real estate impacts of urban and technological change 129
Objectives 129
Diversification of office centres 129
New forms of retailing 133
Changing retail hierarchy and the decline of high/main streets 133
Evolution of warehousing 136
Cities in the information age 139
Summary 140
Learning outcomes 142
13 Real estate investment, planning and urban economic change 145
Objectives 145
Land market and urban development 145
Planning policy responses to urban change 147
viii Contents
Investment, urban change and new real estate forms 148
The emergence of new investment classes 150
The longer-term implications for real estate investment in retailing 152
Financial institutions and other real estate innovations 152
Wider implications for the real estate market 156
Summary 156
Learning outcomes 160
14 Urban public finance 162
Objectives 162
Urban public services 162
Structure of local government 164
Financing of public services 165
Influence of local taxes on property market 166
Urban fiscal problem 167
Central government equalisation 168
Impact of urban change 169
Multiplier effects 171
Summary 171
Learning outcomes 173
15 Transport policies 175
Objectives 175
Scale of the problem 175
Congestion road pricing 176
Investment in roads 180
Traffic management 181
Enhancement of public transport 183
Low emission zones and car bans 183
Investment in cycling 185
Implications for land use patterns and real estate market impacts 185
A future postscript 187
Summary 188
Learning outcomes 190
16 Urban sustainability 192
Objectives 192
Nature of urban sustainability 192
Global policy context 194
The compact city, smart growth and new urbanism 195
Decentralised eco-settlements 197
Polycentric sustainable model 198
Walkable neighbourhoods 199
Reformulation of urban sustainability problem 199
Contents ix
Economic viability of adapting cities 201
Summary 202
Learning outcomes 204
17 Neighbourhood and housing market dynamics 206
Neighbourhood decay and revitalisation 206
Neighbourhood succession 209
Policy questions 212
Summary 213
Learning outcomes 215
PART III
Regeneration and urban growth policies 217
18 Urban regeneration policies 219
Objectives 219
Historical context 219
Traditional approaches to urban renewal 220
Urban social policies of 1960s and 1970s 222
Economic regeneration of 1970s and 1980s 223
Broadening out of the urban policy 227
Urban policy under a Labour Government 1997–2010 228
Urban regeneration in the UK post 2010 230
Summary 232
Learning outcomes 235
19 Urban competitiveness and the real estate market 237
Objectives 237
Building of landmark buildings 237
Agglomeration economies, cities and competitiveness 238
Competitiveness and real estate constraints 242
Offices dispersal policies 245
Logic of real estate−led local economic development strategies 246
Summary 247
Learning outcomes 249
20 Physical and housing-led urban regeneration 251
Objectives 251
New social infrastructure and physical renewal 251
Tourist-led regeneration 252
Retail-led regeneration 253
Housing-led regeneration 255
Experience of Barcelona 257