The role of urban land and how to access it is very important and strategic in urban economy. Having a correct perception of land, urban land market, and effective factors on prices is vital for assessing planning and urban policies. Understanding and analysis of urban land market is like putting the pieces of a puzzle together that requires a search for clues and arranging them beside to each other. Some of these pieces are bigger and more important like how to enter to this market, how people behave, and the manner of supply and demand, and some are less important, but if they are ignored, it will not be completed.

This market, like any other markets, is a complex phenomenon. Even when analysts examine land market with equal and similar information, they reach to different and sometimes contrast results. This market is formed by many forces, elements, and players. In all areas that rapid urbanization is a rule and norm, land market is an area that governments, private sector, agents, influential people, land owners, slum dwellers, and others play role in it.

If all cities’ residents have access to land with services and sufficient infrastructures for their job and life, there would be no need for government to be involved, but it is not the same in the real world and supplying land and appropriate housing with people’s financial help needs government’s involvement, but these involvements should be done cautiously and their effects be recognized. Some government’s involvements can control market power for the poor and even whole the society and reduce the losers of fluctuations in land market while some others can be an opportunity for speculators and rentiers. Therefore, involvement is not a problem by itself, but its manner and intensity is disputable and challenging. Governments regulate urban land market by zoning since land is considered as main element and context of urban development. Physical development of cities is influenced by urban economy; land and housing markets. Rapid growth of population, housing and land markets have changed physical structure of cities in our country in recent decades. Most countries with advanced economy have planned for how to use land and developed land policies. Land policy includes: control style and effectiveness on land use, urban planning, ownership condition, price, and different uses of them in development process applied generally by governments. All countries considering their governance system apply their ideas on housing and land sectors and certain style in controlling the limited good. As this point devotes to housing and residential buildings more than 50 percent in each city and residential space plays role more than other land uses such as commercial land uses, green space, and communicative space regarding extent and importance, controlling residential land use can play important role in using land optimally and creating desirable urban environment.

One of the most important factors affecting the price of land and housing is laws and regulations of land use. These laws influence land market in urban areas. Their social and economic benefits can be assessed accordingly. Economic analysis, whether theoretically or experimentally, shows that effects of laws and regulations can be positive, negative, or neutral depending on the conditions. Today, most governments believe that if urban land market is abandoned to itself, it will be accompanied by many damages naming lack of land allocation to useful land uses. In other words, inequality in urban land use is a source of social and economic inequalities at city level. This is a serious damage of urban development in the absence of laws and regulations. The other damage is the expansion of informal land and housing sector. The researches indicate that there is a significant relationship between land price increase and moving urban poor people to the margins. When supplying land is and expansion of cities is limited, average classes of the society move towards informal settlements and suburbs. The manner of urban land market depends on different factors. One of them is competition. If land market is competitive, its efficacy and efficiency will be added. There are six important conditions for competitiveness of urban land market including well defined property right, voluntarily participation, the number of buyers and sellers, free entrance and exit from/to market, complete, exact, and similar to the product.

Source: Donyaye Eqtesad

News No, 3648