REDEVELOPMENT AND THE URBAN LAND PRICE GRADIENT

This paper presents the first careful test of an equilibrium model of urban redevelopment. In addition, it demonstrates a new methodology for recovering vacant urban land prices in areas that have already been developed. Using data on single family detached homes sold in Vancouver, B. C., we estimate the price of vacant lana based on properties that were sold and redeveloped. The price of developed land is also estimated based on properties that were sold and not redeveloped. Various tests overwhelmingly support the hypothesis that housing is redeveloped when the price of vacant land exceeds the price of land in its current use. This result provides support for various theoretical models of urban spatial growth and indicates that one can recover vacant urban land prices by examining redeveloped properties. (C) 1994 Academic Press, Inc.