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Bid-rent Model

Bid-rent Model. A simple theory to explain urban structure. Introduction-- rent mechanism. The rent derived from certain land use will decrease as well as the land uses will vary with increasing distance from city centre. i.e. distant-decay function

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Bid-rent Model

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  1. Bid-rent Model A simple theory to explain urban structure

  2. Introduction-- rent mechanism • The rent derived from certain land use will decrease as well as the land uses will vary with increasing distance from city centre. • i.e. distant-decay function • The land users who are willing to pay the rent must obtain the use of land in a free market. • The bidder will be the one who will obtain the greatest returns from the land. • b • c

  3. Aims of the model • a simple model to explain the general urban land use pattern. • it reflects the highly competitive bidding for sites among various urban activities and • the differential ability of those activities to bid for sites at increasing distances from the urban centre.

  4. Concepts of the model • In this model, a series of bid-rent curves is used to determine the basic land use pattern. • So, what is a bid-rent curve?…….. • A bid-rent curve is a line which indicates how much a person is prepared to pay for a unit of a land at varying distance from the market / the city centre. • It describes the trade-off of cheaper land rents with higher transport costs owing to increasing distance in traveling.

  5. Concepts of the model • The shape of the curve depends on the transportation characteristics of the product in the case of producers and preference for accessibility in the case of householders. • Transport cost increases with increasing distance. • Such a bid-rent curve assumes that household incomes, product prices, transport cost structures, etc., are kept constant.

  6. Urban land use pattern - nature • Commercial • Industrial • Residential • Questions: • How do their tolerance to declining accessibility, ability to pay and the locational requirement affect their spatial distribution in the urban area?

  7. Commercial land use • cannot tolerate the declining accessibility • they have to occupy the land nearest to the market (where?) and • to be accessible to the information sources and workers.

  8. Commercial land use • Therefore, • the rent will decrease __________ with • increasing distance from the city centre; • the gradient of the bid-rent curve will be very ___________.

  9. Industrial & Residential land uses • these land uses place _______ value on centrality. • e.g. Wong Chuk Hang, Kwun Tong • so, the bid-rent is flatter and __________. • Question: • the spatial distribution of various kinds of residential area -- a contradiction?

  10. Applicability of the model • To a certain extent, it can be applied in the real world. • e.g. the CBD in Hong Kong (Where?) • the industrial land use (Where?) • the residential land use (Where?)

  11. Inapplicability of the model • 1. The presence of minor business nuclei • (secondary peaks & intersections) • e.g. Wanchai, Taikoo (Hong Kong Island) • e.g. Mongkok (Kowloon) • e.g. Shatin (New Territories)

  12. Inapplicability of the model • 2. Topographical factor • - the presence of oceans and mountains • Question: • What are the impacts of the Victoria Harbour and the rugged relief on our urban land use pattern? • (the presence of discontinuous curve)

  13. Inapplicability of the model • 3. Government intervention • - Governments usually intervene in the types of land use for some social and economic considerations. • Question: • Can you quota any examples in HK? • (shifting of industrial districts to the outskirts, new towns)

  14. Inapplicability of the model • 4. Behaviour factor • - The taste and preference of individuals can cause the violation of the ideal land use pattern. • Question: How can you explain the presence of the high class residential area in the Mid-Level near the CBD? • (the symbol of high social status)

  15. Inapplicability of the model • 5. Simple analytical model • Unlike other models, this model does not differentiate between the types of people living within the city; • Thus, the social status of people as an important factor determining the land use pattern may be neglected. • Question: Any examples in HK?

  16. Inapplicability of the model • 6. Vertical expansion • Many multi-storeyed building have been constructed recently because of the improved building technology. • Retailing functions usually occupy the ground floor whereas residential & industrial land uses take up the upper floors. • Result? • (mixed land uses will be resulted)

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