Urban Economics and Real Estate

Doel vak

This course in Urban and Real Estate Economics addresses the
relationship between urban land, real estate and economic development.
It links economic theory to urban and real estate issues, and it links
real estate to a broader context of urban growth and economic
development. Insights are developed through studying theoretical models
and by considering practical examples of the issues at hand.

The following topics are likely covered: (1) Why cities exist, (2) Urban
spatial structure, (3) Land use and urban planning, (4) Housing, (5)
Housing policies, (6) Local public goods and services, (7) Green cities,
(8) Crime, (9) Cities in the Global South.

With respect to each topic the student should be able to define and
describe it and to understand the economic theory as well as the
empirical (econometric) analysis of the topic.

Inhoud vak

Because of technological change (rail, road, air, internet) the cost of
connecting across space have declined sharply, which should have made it
less attractive for people to cluster together in cities. Yet by many
measures, cities are thriving all over the world. Most economic
activities such as production, consumption and innovation take place in
urban areas, despite the relatively high location costs.

Why is this the case? Why are some cities thriving, while others face
serious decline? Why are real estate prices more or less stagnant in
some cities or neighborhoods, while they rise sharply in others? Why do
firms and households prefer one location of the other? When thinking
about location behavior of firms and households, we touch upon various
topics that have a substantial impact on real estate markets. For
example, the economic backgrounds and consequences of suburbanization,
the rise of urban 'subcentres', and the rise of so-called 'network
cities', as witnessed worldwide (and in The Netherlands alike).

At the aggregate level, location choices by firms and households
translate into (changes in) land use and real estate development in
modern cities. In this course the student should learn, both from a
theoretical and empirical perspective to analyze land prices as a
function of, inter-alia, population and real estate characteristics,
location and transport costs. In addition, we identify the
(im)possibilities of influencing the observed trends through urban and
real estate policies. What is the impact of imposing or relaxing urban
planning regulation on real estate development? Finally, we address some
typically urban phenomena in relation to real estate markets: urban
environment and green buildings, crime, and the provision of local
public goods and services such as schooling and parks.

Aanvullende informatie onderwijsvormen

There are three meetings per week. During the first part of each meeting
the lecturer introduces a certain topic, based on the required reading
material. The second part of each meeting is a tutorial, where students
work on assignments under guidance of the lecturer.

Students are expected to have read the material in advance, as the
lectures cover key elements only. The various assignments include a
refresher of essential micro economic theory, development of an
theoretical urban model, an empirical (econometric) analysis using Stata
software and writing an essay.

Toetsvorm

Five assignments (40%) and a written exam (60%). The minimum grade for
the written exam should be at least 5.0 to pass the course. The overall
grade should be at least a 5.5 to pass.

Vereiste voorkennis

Introductionary level of microeconomics.

Literatuur

- Jan K. Brueckner (2011), Lectures on Urban Economics, MIT Press.
- Selected academic papers (see Canvas for details).

Aanvullende informatie doelgroep

Second or third-year bachelor students who want to get a solid
introduction into the economics of cities and real estate, economic
geography or spatial economics.

Aanbevolen voorkennis

Basic knowledge of econometrics (regression analysis) is highly
recommended.