Urban Economics and Real Estate

COURSE OBJECTIVE
This course in Urban and Real Estate Economics addresses the relationship between urban space, real estate development and economic development. It links economic theory to urban and real estate development, and it places real estate development in the wider context of the relation between city growth and economic development. Insights are developed both through studying theoretical backgrounds and by considering practical examples of the issues at hand.

The following topics are 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 you should be able to define and describe it and to understand the economic theory as well as the empirical (econometric) analysis of the topic.

COURSE CONTENT
Becasue 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). We will also look at interdependencies between cities, in terms of their economic dynamics and functional development.

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 you learn, both from a theoretically and empirically 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 local public goods and services such as schooling and parks.

TEACHING METHODS
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, the lectures cover key elements only. The vartious 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.

TYPE OF ASSESSMENT
Five assignments (60%) and a written exam (40%). 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.

ENTRY REQUIREMENTS
Introductionary level of microeconomics.

RECOMMENDED BACKGROUND KNOWLEDGE
Basic knowledge of econometrics (regression analysis) is recommended.

TARGET AUDIENCE
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.