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Álvaro Hepburn

on 25 March 2014

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Transcript of BID-RENT THEORY

This theory was introduced by Alonso in 1964 and it basically is the theory of urban land rent. Everybody wants the land nearest to the center. As it is scarce, the competition for it rises and so do the prices. The person to bid the highest, gets the land nearest to the center.
Graph of the variations in land rents payable by different users with distance from some point in the market.
People are willing to pay more for land close to the CBD and less for land further away from this area.
Different forms of land use (retail, service, industrial, housing, or agricultural) generate different bid-rent curves.
Curve for industry starts lower—manufacturers cannot afford the high rents that retailers can—but drops away less sharply because pedestrian access is not such a key point.
Each land-user will outbid the others at certain points.
Posits a series of land-use rings around the CBD.
Theory takes no account of relief variations, lines of communication, planning constraints, and so on.
Simple and easy to understand
Helps us to understand the process involved in the growth of a city.
Many countries follow the same pattern.
It takes a very broad pattern. Not in all countries the demand for centralised land is going to be so high
Urban regeneration and gentrification has meant that some of the most expensive property can now be found in traditional 'low class' areas.
Case study
Full transcript