Spatial analysis of housing markets with land rent theory of political economy : the cases of London, Seoul and Los Angeles

• Main Author: Park, J.
• Published: University College London (University of London) 2011
• Subjects: 710
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.565580

This study adopts Marxian land rent theory as a framework to understand the structure of house prices with explicit attention to labour reproduction in an urban context. It attempts to correct the misunderstandings in Marxian land rent theory and develop it for an urban context. The four categories of land rent of differential rent, differential rent 2, absolute rent, and monopoly rent are critically re-examined. Subsequently, the combination of absolute rent and differential rent is suggested as a general structure for land rents in an urban context. The dynamic mechanism of changes in land rents is explained with the concepts of emulation, differentiation and shift between groups of houses based on the structure of land rents. The process of the formation of housing submarkets has been examined for a practical preparation for empirical analysis and a theoretical basis for the subdivision of the housing market. Spatial submarkets are identified by focusing on the interactive relationship between residential spheres (a unit consisting of a centre of employment and the surrounding residential area). Sectoral submarkets are defined based on social and environmental features as well as the structural features of dwellings. For empirical analysis, three metropolitan cities were chosen: London as monocentric, Seoul as tri-centric and Los Angeles as polycentric. Empirical analysis has used commuting patterns and the contours of house prices as the criteria to identify spatial submarkets with the help of network analysis and GIS. Simple OLS regression analysis of house prices on the accessibility to centre was conducted in each identified submarket. The results were used to explore the structure of and the dynamic changes in land rents. A consistent structure of land rents was observed in each housing submarket across all three cities. The implication on the condition of labour reproduction was drawn out by interpreting the changes in land rents over a period of 10 years in each city. The analysis of London revealed a monocentric housing market structure and the suitability of commuting time over physical distance as an accessibility variable. In Seoul‟s case, the transition from tri-centric to monocentric housing market was observed and a comparative approach with rent and price data enriched the interpretation of the changes in the structure of the housing market. The impact of social and environmental features of the neighbourhood, such as class, ethnic concentration and negative externality, on house prices was highlighted in the analysis of Los Angeles.