Urban Land Values and Spatial Morphology

Urban land values are the prices or rents of land in different parts of a city, which generally fall with distance from the center, and urban spatial morphology is the study of the physical form of a city: its street pattern, plot sizes, building types and land uses, and how they change over time. In brief: land is most expensive where it is most accessible, usually the central business district, because firms there can reach the most customers and workers. This is the basis of bid-rent theory. The density of people also tends to fall with distance from the center along a negative exponential curve, as in Colin Clark’s model (1951).

The patterns of value and form help to explain why cities are built as they are, and how planning, transport and markets change them. This guide explains bid-rent and land value gradients, urban density models, the elements of city form and how morphologists describe them, compares morphological types in a table, works through calculations, outlines the history and corrects common mistakes.

What determines urban land values?

Land values reflect the benefits that users get from a location. The central idea is accessibility: sites near the center, or near transport nodes, are the most convenient for activities that depend on many customers, such as retail and offices, so these users bid the most. The economist William Alonso (1964) formalized this in the bid-rent model: each type of land use has a bid-rent curve that falls with distance, with a different steepness. Retail and offices, which gain most from the center, have steep curves; housing has a flatter curve; farming has the flattest. The highest bidder takes each location, and the result is a pattern of land use in rings. The point where land value is highest is the peak land value intersection (PLVI), usually at the busiest crossing in the CBD.

Land values are not a simple function of distance. Other influences include transport nodes (stations and highway junctions create secondary peaks), amenities (parks, views, waterfronts, good schools), planning rules (zoning and height limits), neighborhood reputation, hazards (flood risk, pollution) and expectations about future development. Land values show a gradient, falling steeply from the center and then more gently, with spikes along rail lines and at suburban centers. Because land is scarce at the center, owners build upward, so building height and the floor area ratio (floor area divided by plot area) also fall with distance.

How does density change with distance?

The pattern of population density in most cities is described by the negative exponential model of Colin Clark (1951): D(x) = D₀ × e^−bx, where D(x) is the density at distance x from the center, D₀ is the central density and b is the density gradient. A high b means that density falls rapidly, which is typical of compact, older or monocentric cities. As cities grow and transport improves, the gradient flattens, and the city spreads out. In many cities, density shows a dip at the very center, where offices have displaced homes, then a peak in the inner residential ring, and then a decline. Polycentric cities have several peaks. Land values and densities reflect the same trade-off between the cost of travel and the cost of land.

What is urban morphology?

Urban morphology is the study of urban form. M. R. G. Conzen, a German-British geographer, developed an influential approach to town plans in the 1960s, based on three elements: the town plan (the streets, plot pattern and building layout), the building fabric (the types and styles of buildings) and land and building use. He also described “fringe belts”, zones of institutional and open land that form at the edge of the city while it grows and are later engulfed.

• Street patterns: grid (regular, easy to navigate, as in Manhattan and many planned cities), radial-concentric (streets radiating from a center, as in Paris, Moscow and Vienna), organic or irregular (grown without a plan, as in medieval towns and the medinas of North Africa) and cul-de-sac suburban layouts that favor car use.
• Plot and block size: small plots and short blocks (such as the 80 m blocks of Portland, Oregon) support a fine-grained, walkable city, while large blocks and superblocks favor large buildings and cars.
• Building types and heights: from low-rise terraced housing to high-rise towers, with the type affecting density and street life.
• Land use mix: separation of functions (zoning) versus mixed use.

Kevin Lynch, in The Image of the City (1960), described how people perceive a city through five elements: paths, edges, districts, nodes and landmarks, and the idea of “legibility,” which is how easy it is to understand and navigate.

How do land values and form change?

Cities change through new transport (the railway, the tram and the car each shaped successive layers of growth), planning policy, redevelopment and the decline of old industries. Examples are the waterfront redevelopments of former docks and the revitalization of city centers. Rising land values can drive densification, the replacement of low buildings with taller ones, and push uses with lower bids, such as housing for low-income groups or small workshops, to the edge or out of the city. Conversely, falling values in declining areas can lead to vacant lots and abandonment, as in parts of Detroit. Policies such as land value capture (taxing or recovering part of the increase in value that results from public investment, such as a new metro line), height limits and green belts are used to manage the effects.

Street and form patterns compared

Worked example: gradients and walking areas

The values are hypothetical and illustrate typical calculations.

1. Density gradient: a city has a central density D₀ of 20,000 people per km² and a gradient b = 0.10 per km. At 10 km from the center, the density is 20,000 × e^−1.0 = 20,000 × 0.368 = 7,358 per km². At 20 km, it is 20,000 × e^−2.0 = 20,000 × 0.135 = 2,707 per km².
2. Flatter gradient: if the gradient falls to b = 0.05 after suburban growth, the density at 10 km is 20,000 × e^−0.5 = 20,000 × 0.607 = 12,131 per km², which shows a more spread-out city.
3. Distance at which density is half: the density falls to half the central value where e^−bx = 0.5, so x = ln 2 ÷ b = 0.693 ÷ 0.10 = 6.9 km.
4. Land value gradient: land at the PLVI costs 12,000 per m², and at a distance of 1 km it costs 4,800 per m². The value at 1 km is 4,800 ÷ 12,000 = 40% of the peak. At 10 km, it costs 600, which is 600 ÷ 12,000 = 5% of the peak, a twenty-fold difference.
5. Walking area: a station with a walking radius of 800 m (about a 10-minute walk) serves an area of π × 0.8² = 2.01 km². For a radius of 400 m (5 minutes), the area is π × 0.4² = 0.50 km², four times smaller.
6. Floor area ratio: a plot of 2,000 m² with a building of 12 floors, each with 1,200 m², has a floor area of 14,400 m² and a floor area ratio of 14,400 ÷ 2,000 = 7.2.

How did the theories develop?

The German economist Johann Heinrich von Thünen explained the use of land around a market in his model of 1826, which was an early form of the bid-rent idea. Richard Hurd (1903) and Robert Haig (1926) wrote on urban land values and the CBD, and the Chicago School’s models of the 1920s and 1930s described land use zones. Alonso’s Location and Land Use (1964) set out the modern bid-rent theory, and Colin Clark’s density model appeared in 1951. In the study of form, Conzen’s work in the 1960s and Lynch’s Image of the City (1960) laid the foundations of urban morphology, and from the 1990s, space syntax (Bill Hillier) has analyzed how street layouts affect movement. Today, GIS and big data are used to map land values, densities and morphological types for entire cities.

Which mistakes are common?

Mistake 1: Assuming that land value falls smoothly everywhere

Transport nodes, amenities and local conditions create peaks and irregularities, so the gradient is a general trend.

Mistake 2: Thinking that the CBD has the highest density of residents

Offices and shops dominate the center, and the population density is often higher in the inner residential ring.

Mistake 3: Confusing land value with property value

Land value is the value of the site. Property value includes the value of the buildings on it.

Mistake 4: Treating city form as fixed

Street patterns are long-lasting, but buildings, uses and densities change continuously in response to economic, technological and policy changes.