SPATIAL VARIATION IN THE PRICE OF HOUSING - RENT GRADIENTS IN NON-MONOCENTRIC CITIES

Monocentric models of residential location assume a single employment node which is located at the center of the city (CBD). If all households have at least one employed member, transportation is not free, and a spatial equilibrium exists, then these models show that housing prices will fall with distance from the CBD. Distance from the CBD functions as a measure of employment accessibility. Unfortunately, cities rarely have a simple monocentric structure. Employment and amenity centers located outside of the CBD may cause the rent gradient to be complex. Thus, empirical studies of housing prices that use distance from the CBD as the sole measure of employment accessibility typically find that distance has little effect on housing prices. The problem is not that households do not value access, but that they value access to places other than the CBD. In this study, we demonstrate the potential downward bias due to the monocentric assumption by estimating the rent gradient in a manner that it sensitive to non-CBD employment and amenity centers. -from Authors