How is urban land use related to land value?

Urban land use is determined by the various decisions made by firms, households and the government (primarily local authorities). Firms occupying shops, offices and factories have on occasions to decide whether to expand and, if so, whether to move or redevelop the existing site. Moreover, in a dynamic economy, new firms come into being and have to choose where to locate. Similarly, households decide where to live, and if many people move in a particular direction – for example, to the suburbs – it profoundly affects the character of urban land use. Finally, government authorities influence land use through the control of development, overall transport policy and the siting of roads, and by local authority house-building and comprehensive redevelopment.

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