synthesis class 2

Vocabulary flashcards covering the major concepts, terms, and theories discussed in the lecture on land use economics, demand, value, and urban form.

Demand

Wants and needs of the marketplace that drive the need for space; without demand, there is no value.
Real-life scenario: An influx of new tech companies offering high-paying jobs in a city increases the demand for housing and office space.

Value

The market-assessed worth of space, driven by demand and the space’s ability to meet that demand; not determined solely by comps.
Real-life scenario: A retail space in a prime shopping district might have higher value than a similar-sized space elsewhere, even if comparable sales (comps) are similar, because its high foot traffic uniquely meets a retailer's demand for visibility.

Economic rent

The amount a business can afford to pay above operating costs to locate in a place; a proxy for locational value beyond basic costs.
Real-life scenario: A popular coffee shop can afford to pay a significantly higher rent for a corner spot with high visibility and foot traffic in a downtown area because that location generates far more revenue than a less visible spot, even after accounting for operational expenses.

Residual land value

Land value remaining after deducting development costs and required entrepreneurial profit; used to determine maximum land price.
Real-life scenario: A developer projects that a new apartment building will generate X in revenue. After calculating construction costs, financing, and a desired profit margin, the remaining amount is the maximum they can pay for the land to make the project feasible.

Bid rent theory

Idea that land use and value vary by distance to the market; proximity and productivity drive willingness to pay, creating a rent gradient.
Real-life scenario: Office rents are highest in the city center (CBD) and gradually decrease as you move towards the suburbs, reflecting businesses' willingness to pay more for central access to clients, suppliers, and labor.

Central Business District (CBD)

The city’s core where major economic activities are concentrated; typically the most accessible and highest-value area.
Real-life scenario: Downtown Manhattan, with its skyscrapers housing corporate headquarters, financial institutions, major retail, and extensive public transportation, serves as New York City's CBD.

Urban form

The physical structure and layout of a city (street patterns, density, deployment of space) shaped by economy, context, and geography.
Real-life scenario: Paris's urban form, characterized by dense, mid-rise buildings, radial avenues, and historic preservation, reflects its long history and cultural emphasis, differing greatly from a sprawling, car-dependent Sunbelt city.

Transportation access

Accessibility to markets via roads, rails, and other transport; a critical driver of where development occurs.
Real-life scenario: A new highway interchange or a subway station opening can significantly increase the demand and value of properties within a short distance, as they become more accessible to commuters and consumers.

Major arterial

High-capacity regional roads with large traffic volumes that provide visibility and easy access for users.
Real-life scenario: A retail strip mall located along a six-lane major arterial road benefits from thousands of cars passing by daily, offering high visibility for its businesses and easy access for customers.

Scarcity

Limited supply of land or resources relative to demand, driving competition and higher values.
Real-life scenario: In a geographically constrained coastal city like San Francisco, the limited amount of developable land combined with high demand leads to extremely high property values and intense competition for housing.

Opportunity cost

The value of the best foregone alternative when choosing one option over another.
Real-life scenario: A city developing a large public park on a prime downtown lot incurs an opportunity cost by foregoing the potential tax revenues and economic activity that could have been generated by a commercial tower on the same site.

Risk

The likelihood that an investment’s predicted performance will be off due to future uncertainty; planning for uncertainty is essential.
Real-life scenario: A developer planning a luxury condominium project takes on market risk, as a sudden economic downturn could lead to units selling below projected prices or remaining vacant, impacting profitability.

Zoning

Regulatory framework dictating allowable uses and developments on a property; constrains rights and affects value.
Real-life scenario: A property owner wants to build a five-story apartment complex, but the local zoning ordinance only permits single-family homes in that area, limiting their development options and affecting the property's potential value.

Village Planning Commission

A localized planning body composed of residents to guide land-use decisions within a village area; typically has limited authority.
Real-life scenario: Residents of a small village discuss and approve or reject a proposal for a new small-scale retail store, ensuring it aligns with the community's vision and character through their Village Planning Commission.

Land use models

Theoretical frameworks describing spatial patterns of urban land use (e.g., CBD/concentric, sector models) and how factors like transportation influence them.
Real-life scenario: Using the Concentric Zone Model, urban planners might observe that a city's growth radiates outwards from a central business district, with industrial zones and low-income housing closer to the center, transitioning to higher-income residential areas further out.

Locational premium

Premium paid above the median rent for space with desirable attributes (visibility, access, proximity to customers or markets).
Real-life scenario: A restaurant might pay a significantly higher rent for a corner unit in a busy downtown area with large display windows, recognizing the locational premium for superior visibility and foot traffic compared to an interior unit on a less prominent street.

Disamenity

Negative attributes near a site (noise, landfill, floodplain) that can reduce value unless mitigated.
Real-life scenario: A house located directly next to a noisy highway or a waste treatment plant will typically have a lower market value than a comparable house in a quiet, residential area due to the significant disamenity.

Polycentric urban area

A metropolitan region with multiple centers of activity rather than a single dominant CBD.
Real-life scenario: The Dallas-Fort Worth metropolitan area is polycentric, featuring multiple distinct business districts and employment centers (e.g., Downtown Dallas, Uptown, Plano's Legacy West, Downtown Fort Worth) rather than relying solely on one central core.

Impact fees

Developer charges intended to cover future infrastructure costs generated by new development; can affect feasibility and pricing.
Real-life scenario: A developer building 200 new homes might pay impact fees to the local municipality to help offset the cost of expanding schools, roads, and water lines that will be needed to serve the increased population.

Concurrency fees

Fees similar to impact fees used to ensure infrastructure capacity keeps pace with growth; affect project economics.
Real-life scenario: In a rapidly growing county, a developer might pay a concurrency fee to ensure that the public road system can handle the additional traffic generated by their new commercial complex, or else the development might not be approved until infrastructure improvements are planned.

Primary/Secondary/Tertiary city

Urban hierarchy: primary cities have larger economies and higher-order uses; secondary and tertiary cities have specialized roles.
Real-life scenario: New York City is a primary city (global financial hub), Austin, Texas, is a secondary city (regional tech hub), and a smaller city like Bryan, Texas, could be a tertiary city (serving local agricultural and university needs).

Economic base

The core industries and activities that support a city’s economy and drive growth and development.
Real-life scenario: Orlando, Florida's economic base is largely tourism and entertainment, driven by theme parks like Walt Disney World and Universal Studios, which attract millions of visitors and generate significant employment and revenue.