ARCHITECTURE

Asset Market:
Valuation
Price $
Asset Market:
Construction
account for
technology
P=f (C)
sets of preferences and incomes. When it comes to
variations among cities, the book notes the need to
account for the variables of climate, region, and history.
However, the three factors of city size, expected
growth, and construction costs account for 76 percent
of housing price variation. 36
P= R i
Rent $
Construction
(sq. ft.)
Static Equilibrium Model, DiPasquale and Wheaton, p. 12.
Property Market:
Rent Determination
D(R 1
Economy) = S
S= C
( S=C - S)
Stock (sq. ft.)
Property Market:
Stock Adjustment
Technology acts to transform the intensity of these
relationships over time. The authors explain postwar
patterns of manufacturing and distribution decentralization
in terms of new transportation, production,
and storage technologies. 37 Similarly, residential
real estate has continuously suburbanized, though
technology’s influence on home prices remains
mostly implicit in this text. 38 The dispersal of office
and retail clusters, on the other hand, derives from
residential suburbanization, as stores relocate to
chase commuters and offices move to lower-rent areas
where they can pay lower wages. 39
Commuter transportation systems are characterized
as barriers to the fully decentralized city.
Though perfect sprawl would be “logically consistent
and economically rational,” this ideal is unrealizable
in practice; real highways and rail systems
value
histories
factor in
pleasure
necessarily channel commuters in ways that produce
and reinforce concentrations. 40
In addition to the equilibrium model, other kinds of
images, such as line graphs and maps of regional intensities,
populate this book. In the line graphs we
can read a story of change over time. They convey
the change of such values as the relationship between
price and density, legible within the epoch in
which the equilibrium model is relevant. These historical
values provide evidence with which models
are built and tested. 41
However, the book also acknowledges a sense
of historical rupture, one that leaves a legacy that
does not conform to economic logic. Bounding this
logic in time is the transition to a new, post-industrial
economy. This rupture rises to visibility in some
of the book’s case study maps of the Boston region.
While earlier industrial patterns do not fit contemporary
models, they persist in two modes: as recalcitrant,
sub-optimal building stock, and as neighborhoods
with historic values defended by residents. 42
This historic value is sometimes quantified, becoming
one of the various, heterogeneous components of
“hedonic value.” Economists adopted hedonic value
from utilitarianism as a way to describe the complex
factors entering into the price of a building. These
include quantitative factors like a unit’s square footage,
features like second bathrooms; they also include
expert assessment of more subjective values,
like “the general quality of the neighborhood.” 43
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