Reference no: EM131733969

Question: (Dynamics of Urban Form) The simple monocentric city model is a long-run, static equilibrium model in which the past does not matter; in response to a change in income or population, the city is torn down and rebuilt in the new long-run equilibrium form. The explicit recognition in the current chapter of time (age) and the durability of real estate structures that depreciate over time means that a city is shaped by both its past and current market dynamics. Based on what you learned in this chapter about how cities grow as well as property and neighborhood life cycles, explain the economic logic underlying the following statements:

a. Cities tend to redevelop from the center outwards.

b. Older, growing cities offer significantly more redevelopment opportunities.

c. The density of housing falls with distance from the city center over time because of rising incomes and decreasing commuting costs, not because of a commuting cost-housing consumption tradeoff. [Assume housing is a ‘‘normal'' consumption good, the demand for which increases with income. Also assume higher-income households demand higher quality housing.]

d. Synthesize your answers to (a) through (c) and explain why many U.S. metropolitan areas are witnessing significant new housing construction at both the outer edges and the central city, with some redevelopment also taking place in so-called inner-ring suburbs.