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Full Summary Real Estate and Land Supply
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Full summary of the course Real Estate and supply. All obligatory literature included (Evans + Articles), and also all lectures during the course.
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REAL ESTATE U FINAL EXAM AND FINAL PRACTICE EXAM LATEST ACTUAL EXAM
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By: jerrol2 • 3 year ago
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RES & Land Supply lecture notesDate Materials Deadlines Status
week 01 Course manual Complete
week 02 Ch. 1 + 2 / Art. 1 Alonso Complete
week 03 Ch. 3 / art. 2 – art. 3 + 4 Complete
week 04 Ch. 4 + 5/ art. 5 – art. 6 + 7 Complete
week 05 Ch. 8 + 9 / art. 8 – guest lecture = Ch. 6 Complete
week 06 Ch. 10 + 11 / art. 9 – guest lecture = art. 10 Complete
week 07 Ch. 14 + 15 + 16 / art. 11 Essay draft Complete
19/10
Essay-peer
22/10
week 08 Recap + essay pitches (26 oct) Essay final
29/10
Week 10 Exam 10/11
Table of Contents
Week 02................................................................................................................................................... 2
Lecture 02 – Understanding land rents gradients ............................................................................... 2
Chapter 01 ........................................................................................................................................... 5
Chapter 02 ........................................................................................................................................... 6
Article 1. Alonso (1960) ..................................................................................................................... 10
Week 03................................................................................................................................................. 13
Lecture 03 – real estate and land configurations .............................................................................. 13
Lecture 04 – literature discussion ..................................................................................................... 16
Chapter 03 ......................................................................................................................................... 18
Article 2. Breheny .............................................................................................................................. 21
Article 3. Glaeser ............................................................................................................................... 21
Article 4. Bertaud & Renaud .............................................................................................................. 22
Week 04................................................................................................................................................. 23
Lecture 5 ............................................................................................................................................ 23
Lecture 06 .......................................................................................................................................... 27
Chapter 04 ......................................................................................................................................... 29
Chapter 05 ......................................................................................................................................... 31
Article 5. Wheaton ............................................................................................................................ 34
Article 6. Galster ................................................................................................................................ 34
Article 7. Myers ................................................................................................................................. 35
Week 05................................................................................................................................................. 36
Lecture 07 – Ownership of land ........................................................................................................ 36
, Lecture 08 – vd Vlist/Planning & development ................................................................................. 41
Chapter 06 – the supply of land for a particular use ......................................................................... 46
Chapter 08 ......................................................................................................................................... 48
Chapter 09 – Land ownership, Politics and society ........................................................................... 50
Art. 8 Boeing et al. Tilted Platforms: Rental Housing Technology and the Rise of Urban Big Data
Oligopolies” ....................................................................................................................................... 51
Week 06................................................................................................................................................. 53
lecture 09........................................................................................................................................... 53
Chapter 10 ......................................................................................................................................... 56
Chapter 11 ......................................................................................................................................... 59
Art. 9 – Gabriel .................................................................................................................................. 61
Article 10. Boardman......................................................................................................................... 61
Week 07................................................................................................................................................. 62
Guest Lecture Sijtsma ........................................................................................................................ 62
Lecture 11 .......................................................................................................................................... 63
Chapter 14 ......................................................................................................................................... 68
Chapter 15 ......................................................................................................................................... 70
Guest lecture Gert-jan Slob ............................................................................................................... 72
Article 11 – Louw ............................................................................................................................... 74
Week 02
Lecture 02 – Understanding land rents gradients
Highest producing land, generates the highest value (Ricardo’s theory of production/corn)
Might there be a situation where land has no value?
- Land that can’t be reached
- Demand and supply
o Demand orientated theory – land values can range from zero to “infinity”
o However, the supply is not infinite → therefore, the supply is fixed.
Ricardo’s classical model
- Supply in land is fixed
- Land has a single use: corn production
- Land demand derives from corn demand
- Rent is a residual
- The rent of land is high, because the price of corn is high and not vice versa.
,Neoclassical model (Evans) → adjusted version of Ricardo’s model
The difference between the models is described by the competition between two different goods
(potatoes versus corn) → competition between land uses
- Price of corn is higher because the rent of land is high
What if only the demand for corn would remain; what would be the price of corn?
- Prices could drop, because there is less competition on the market and the supply of land is
fixed. You would go down along the demand curve for potatoes
What if potatoes and corn were perfect substitutes (if we see more of the one good, we have less of
the other) in a closed economy, demand for potatoes goes up, what would be the land rent?
This also happens in the housing markets when it
comes to substitutes → flats versus houses. Strict
separation
When does Ricardian or neoclassical thinking
apply?
- Strict separation of uses
, Hierarchical land use controls – neoclassical thinking
because we assume competition between substitutional goods.
- Note that not only demand shapes land rents, but also the planned supply of land!
For example, Westerhaven → former living area but shopping becomes more popular. The
neighbourhood anticipates on this trend by converting more housing into shopping.
Alonso bid rent model (Von Thunen in the city)
Alonso → CBD (high business – high rents), rent decreases going further away from that area.
Bid for land = total profit. Distance increases (more transportation costs) → the bid for land
decreases.
- Higher transport costs imply lower bids for land (Alonso’s assumption)
- Increased transport costs, decrease the profits and the amount to bid for the land.
o That’s why poorer people normally live in the city centre and more wealthy people in
the outskirts
- Profitability of a good decreases → bid for land would decrease as well.
- Output of a good increases at the same amount of transport costs, this would mean profits
increase and therefore the bid for land could be higher. (try this out in the excel file by
putting in higher yields of a good).
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