Status, Quality and the Other Trade-off: Towards a New Theory of Urban Residential Location
Hoang Huu Phe, Patrick Wakely
Hoang Huu Phe
Development Planning Unit, University College London, 9 Endsleigh Gardens, London WC1H 0ED, UK,phebinh@cix.co.u
Patrick Wakely
Development Planning Unit, University College London, 9 Endsleigh Gardens, London WC1H 0ED, UK, p.wakely@ucl.ac.uk
Summary The existing models of residential location are facing difficulties in explaining new trends in urban development such as gentrification and abandonment. The mainstream approach which stresses the bid-rent formulations and the access/space trade-off seems to be at variance with the current reality of dispersal of both industry and housing in modern cities. In this paper, it is proposed that the focus on the city centre(s) and distance(s) from it (or them) should be shifted to two other categories of parameter: housing status and dwelling quality. A model of interaction between these parameters can be used not only to describe but also to predict various types of residential development in different urban contexts. The components of a new theory of residential location are proposed.
1. Urban Residential Location: Theories and Realities
Ever since von ThuÈnen (1826/1968) gave his version of the concentric city-region, geographers, urban economists and planners have been working on theories of city structure that can both explain and predict the ways in which cities are formed and have evolved. Full accounts of these efforts have been given by Hallett (1978), Hudson and Rhind (1980), Maclennan (1982), Kivell (1993) and Balchin et al. (1995). As housing makes up the major part of the land of cities, the theories of city structure are, to a large extent, about residential location. In a broad sense, the theories of residential location fall into two main groups: the market approach and the non-market approach .
The market approach is championed by the urban economists, although it has its origins in the sociological observations of the Chicago School in the 1920s (Maclennan, 1982). Three main theories are used to explain private-sector housing location: travel-cost minimisation; the travel-cost/ housing-cost trade-off; and maximum housing expenditure. A detailed summary of these theories is given in Balchin et al. (1995). Of the three theories, the second is the most widely accepted and, for this reason, has become the most developed theory of residential location. It basically states that, given an opportunity, a perfect mobile household would move to a plot where it can satisfy its spatial requirements while paying acceptable transport costs; that is, to make the access/ space trade-off in the way proposed by Hurd (1903), Isard (1956), Alonso (1964), Muth (1969), Evans (1973), Romanos (1976) and Thrall (1987). Although reservations have been expressed, even in its early days (Firey, 1947), the theory’ s success in replicating empirical regularities in Western cities has made it a preferred analytical tool (Basset and Short, 1980). It is now "the dominant paradigm of urban economic research" (Maclennan, 1982, p. 7) and, as recently as in 1989, an attempt was made to extend it into a normative theory (Fujita, 1989).
The non-market approach has a substantially longer history than the first. It dates back to the writings of the classical thinkers such as Plato and Aristotle (Roll, 1990). Basically this approach analyses the residential distribution and city structure in terms of social groups inhabiting urban areas, with some groups taking advantage or control over others. In its modern form, the nonmarket approach is principally represented by sociologists, geographers and political scientists (Rex, 1968; Pahl, 1975; Harvey, 1973; Smith, 1987). Its strongest points tend to critique the market-based theories that are characterised by their ahistorical outlook. They point out that instead of resulting from market competition, land and house price and, by extension, residential location patterns are in fact strongly in¯ uenced, indeed manipulated, by landed capital through monopolistic rent (Harvey, 1973; Smith, 1987).
If disagreement between the two approaches largely concerns their theoretical underpinnings, their application is facing no less serious a challenge. Both market and non-market approaches have shown considerable discrepancies when applied to real-life situations
Among the phenomena that the market approach fails to explain, gentrification is a very telling example. The trade-off theory maintains that the rich have a natural propensity to live in large properties in the suburbs, where the land is cheap and the environment is good, because they can afford the transport costs. The poor live in the inner city because they cannot pay for high transport costs. Despite a heavy degree of simplification, this was more or less accepted until the 1970s and 1980s, when the rich moved into derelict areas in the inner city, renovated them and stayed, in a widespread phenomenon later called gentrification (Hamnett and Williams, 1980). No satisfactory explanation was offered without the risk of contradicting the fundamental assumptions of the access/space trade-off theory. Similarly, the increasing incidence of abandonment in housing estates of largely decent physical quality and low rent, implying the dispersal of job and residence in other words, the everyday realities in modern cities also seems to be at variance with the access/space trade-off theory, which stresses a purely economic, rational and mechanistic behaviour of the residents.
It was left to the non-market urban theorists to deal with the new discrepancies, such as Smith’s rent-gap theory for gentrification (Smith, 1987), and a series of post-modern interpretations of the new urban realities(Harvey, 1991; Soja, 1996; Dear and Flusty, 1998). Although some of these theoretical lines are more successful in offering explanations for the new urban phenomena, the non-market approach’ s underlying point about monopolistic rent has never really been supported by empirical data (Kivell, 1993). Being absorbed by the role of capital, proponents of this approach have a tendency to ignore some powerful impetuses for residential location, such as life-cycles, personal preferences and taste.
A satisfactory theory of residential location and city structure thus still remains elusive or, as Dear and Flusty (1998) commented, a `scarce commodity’ . There is a paradox in the seemingly wide acceptance that, despite all their problems, the older and more simple residential location theories are probably more workable after all (Balchin et al., 1995). At the same time, this is also a clear recognition of the limitations of existing theories. Some reasons for this can be identified.
For the market approach, perhaps the biggest obstacle that prevents it from achieving not only a close description, but also a satisfactory explanation of residential loca-tion, is the excessive reliance on physical, measurable variables, the meanings of which could undergo fundamental changes during different historical times. The role of the city centre and the distance to it is the clearest example. It is now a truism that the centre of even the monocentric city, if it exists at all, no longer plays the overwhelmingly important role assigned to it as the only concentration of employment, nor does the distance from it act as the defining constraint. In many countries of the West, some downtown areas could be transformed from lively shopping cores into deserted blocks if the out-of-town shopping mall developers had their way. With the new trends of dispersal, the new industrial and office developments (especially the high-tech ones) are no longer dependent on distanceÐ either to the marketplace or to sources of material supply for their survival, as a result of modern means of mass transit and air transport, telecommunications and computer networking.
The non-market approach does not suffer such an obvious obsolescence, mainly because it is based either on human relationships or on relatively stable notions such as the government and the planning organisations, etc. Their underlying concepts, such as monopolistic rent and the working of institutions, however, are appealing but difficult to prove and quantify in reality. Recognising that the neo-classical models achieved important results in replicating patterns of residential location, they call for a combined theory that can incorporate both the use value and the exchange value aspects of residential locations. But so far no visible progress in this direction has been recorded (Kivell, 1993).
It should be noted that most of the existing theories of residential location are the direct results of observations of Western cities, especially in the US, within a particular historical time (the first half of the 20th century). There were attempts to create specific theories of city structure in different geographical regions such as east Asia (Rimmer, 1991; Sit and Yang, 1997), south-east Asia (McGee, 1991) and eastern Europe (French and Hamilton, 1979; Szeleny, 1983), but these efforts are being challenged by the unstoppable process of globalisation. According to the concept of global urban hierarchy (Hall, 1984; Friedman, 1995; Sassen, 1995), the structure of a city depends on its position in the global urban network. On the other hand, the enormous footloose capital circulating around the world can change any city almost overnight, and cities on its circuit may appear more similar to each other than to the other cities in the same country or region (a similar phenomenon was observed much earlier, during the peak of the colonial era (see Clark, 1996). Thus the traditional division of identity between cities in developed countries and those in developing countries may not be as clear-cut as in the past. Therefore, it is no surprise that there are serious difficulties in trying to apply the existing theories, based largely on historical data, to urban centres that are governed by completely new and different processes.
Thus the need for a new theory is selfevident. In seeking to overcome the inherent difficulties mentioned above, this paper is an attempt to reconcile the differences between the market and non-market approaches, by adopting a more flexible line of reasoning. It builds mainly on the social aspects of residential location, which are believed to be capable of offering a more appropriate explanation, while acknowledging the need to incorporate the methods and techniques that make it easier to quantify and describe patterns of urban residential location. It should be noted that although the case study refers to Hanoi, because of access to suitable data, the proposition is by no means confined to cities in developing countries.
6. Concluding Remarks
A redefinition and a reinterpretation of largely familiar groups of factors that influence residential locational decisions have led to the postulation of a new theoretical model which can describe and satisfactorily explain more real-life situations than the preceding models. One of the most important points in which this model differs from its predecessors is the conscious avoidance of the rigid economic determinism that often assumes away many elements, some of which are indispensable in explaining the spatial behaviour of the urban households. The flexible definition of housing status, which changes quite frequently, is borne out of realistic reasoning that allows historical processes to play a role in formulating residents’ perception of housing. Physical distance enters the model only as a calibrated dimension that is subject to the size of the sphere of influence exerted by social forces, rather than as the fixed, defining factor, as in the conventional models. Instead of being the results of the economistic access/space tradeoff, the patterns of residential location in cities have been shown to be the outcome of other kinds of trade-off, which are largely social in nature the ones that are based on status and the social acceptability of dwelling quality.
At a more generalised level, the model represents a trade-off, or rather a balance, between the ideal and the possible, such as occurs in any sort of spatial activity, be it consumption or investment, production or living, working or leisure. The tension created by a lack of this balance, and the constant movements within and between `desirable’ and `undesirable’ zones, are what drive the dynamics of the urban housing scene that contributes so substantially to the shaping of cities. As such, this model can be adapted to analyse the spatial behaviour not only of the residents, but also of the industrial developers, investors in infrastructure and urban services.
In the final analysis, it is never possible to model the residential structure of a city with all its complexities: there are too many variables and irregularities. The case of Hanoi, however, does show some of the possibilities and limitations of the model. In the analysis of urban residential development, perhaps the quality-status model allows us to go beyond the famous empirical dictum `First, location; second, location; and, third, location’ , by giving a definitionــــhowever tentative or impreciseـــــof what is behind the notion of `location’ that makes it so powerful.
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Urban Studies; London ,Volume: 37 issue: 1, page(s): 7-35, January 1, 2000
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