Forecasting Demand for Urban Land

Abstract

To this point, the chapters in this volume have focused on land supply. They have addressed issues such as (1) what constitutes buildable land; (2) how environmental constraints, infrastructure and other public policies can affect its buildability; and (3) how to identify land that, though effectively built, can still accommodate new growth through redevelopment. Their assumption has been that there would be some need for a supply of buildable land: in other words, that a demand for buildable land exists. Supply of and demand for buildable land are essentially two sides of the same coin. Assessment of land supply would be incomplete without an assessment of the demand for buildable land. This chapter provides a framework for thinking about the demand for urban land and provides some examples of techniques for estimating that demand. That land use planning should explicitly address the supply of and demand for urban land is not surprising. Land use planning in the twentieth century United States has always been about forecasting and tinkering with market forces. Land development in the U.S. results from market transactions that occur in the context of public regulations.1 Municipal and regional governments try to anticipate the demands of growth and to supply the serviced, buildable land to accommodate it. In the U.S., planning occurs in the context of markets. Planning for growth and land use means, inevitably, intervening in the markets for land and development. If planners think such intervention will make an urban area better (more efficient, aesthetic, satisfying or fair) for the people who live or work there, they must make some assessment of where the market is likely to go with and without a proposed intervention (e.g., a land use regulation). Any evaluation of public policies to manage growth and land development must consider markets, and the accepted paradigm is basic microeconomics: supply and demand.