Participation assignment

Alexandra Jardim
ADMN 445
Understanding Economy Activity of the Capital Regional District in BC

The Value of Land

The value of location is determined by two attributes (Richard Hurd):
1) Proximity: The willingness to pay premium to be near amenities such as employment, parks, views and quiet.
Industries can also be found close together to share resources including infrastructure and local services
(Skaburskis & Moos, 2010).
2) Accessibility: The ease of moving between locations. Enhancements to transportation infrastructure increase
the value of nearby land by improving accessibility through the expansion of highways and public transit
(Skaburskis & Moos, 2010).

In the Capital Regional District (CRD), the value of land is highest in downtown Victoria. However, given the high cost of
land and development of transportation networks, Langford has grown into a secondary core urban center with clusters of
industries, proximity to amenities and access to employment and transportation.
Characteristics of Urban Land Markets
Rent vs Price
 Rent: What an individual or firm is willing to pay for the use of a property
 Price: The value of owning the property when it is sold. Price is determined by the anticipated future value for the
use of the property (Skaburskis & Moos, 2010)
Land Rent (Theory founded by David Ricardo): Conceptual framework that explains contemporary land markets. Payment
made by a user of a particular piece of land to the landowner for the right to use or occupy the land (Skaburskis & Moos,
2010).
Land Price Gradient: The “base rent” for urban areas is determined by the least attractive land (Skaburskis & Moos, 2010).
Highest and best use: determination of the maximum value of land and what someone is willing to pay for the
characteristics of the location (Skaburskis & Moos, 2010).
Bid-rent curves: Illustrates how households balance proximity to the city center with land costs to maximize well-being.
Higher-income households, desiring larger lots, move towards the periphery for lower land costs, while lower-income
households opt for higher-density inner-city living to reduce commute expenses, despite the higher land prices (Skaburskis
& Moos, 2010).
Gentrification: Influx of wealthier households returning to the inner city leading to the redevelopment, resulting in the
displacement of lower-income populations (Skaburskis & Moos, 2010).

In the CRD, the effects of urban land markets are seen in the valuation of property. The further outside the downtown core
of Victoria, the lower the price of land. Bid-rent curves are seen outside the core in more suburban areas of Saanich and
Oak Bay where wealthier households have developed on larger lots. The downtown core has a higher density of condo
buildings where owners have significantly less land. The density within the Vicotria core makes any vacant land a premium.
For example, surface parking lots are worth a premium for any future development potential. Gentrification can be seen in
the downtown core of Victoria with the increase of newly developed condos and rental complexes catering to higher
incomes have pushed out lower income individuals and resulted in a growing population of unhoused people.
Agglomeration Economics
Agglomeration and clustering theories suggest that the production of advanced, customized goods and services relies on
significant inputs of information, skills, and technology, which are more accessible in major urban centers compared to
smaller ones for lower-value goods and services (McCann, 2013). An example of this:
 Industrial clustering/concentration: firms with comparable production, supply inputs and target markets tend to
concentrate in the same geographic areas (McCann, 2013).
Industrial dispersal: firms that choose to be spatially dispersed. Reasons typically include the geographical areas required
(primary extractions, agriculture) or the desire to avoid price competition (McCann, 2013).

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Understanding Economy Activity of the Capital Regional District in BC

In looking at the CRD, outside the downtown core, there is an industrial area near the Bay Street bridge, where there is a
concentration or clustering of firms specializing automotive materials and auto repair shops.
Urban Systems
Urban Hierarchies: Spatial distribution of cities often displays distinct features, with nations typically having one or two
central primal cities located in major populated regions, serving as key production centers for the economy. Smaller cities
in peripheral regions tend to focus on specific outputs and exhibit a hierarchical pyramidal pattern in both size and spatial
distribution (McCann, 2013).
The CRD has a large city center, Victoria, then outside that, there are smaller cities and towns. Outside these smaller cities
and towns, on the periphery there are more rural pockets with smaller populations.
Central Place Theory
Theory introduced by Walter Christaller that explains how the city is the central place providing goods and services to
surrounding areas. Low-order goods, such as routine household items, thrive in small towns as people buy them
frequently. In contrast, high-order goods like automobiles and furniture require larger markets, leading businesses
specializing in such items to concentrate in big cities (Briney, 2020).
In the CRD, evidence of the central place theory is seen in how the region is organized. At the core, more industries and
higher-order goods are found. Outside of this, low-level goods are found in the smaller cities and towns in the region that
surround the center. As noted above, a secondary, smaller core has begun to develop in Langford where some of these
higher goods can be found such as automobiles and furniture shops.

Map retrieved from Times Colonist (2017)

References
Briney, A. (2020). Christaller’s Central Place Theory of Urban
Geography. ThoughtCo.
https://www.thoughtco.com/central-place-theory-1435773

Census: Thousands of unoccupied dwellings in Victoria. (2017, February

9). Times Colonist.
https://www.timescolonist.com/business/census-thousands-of-
unoccupied-dwellings-in-victoria-4646259

McCann, P. (2013). “The Spatial Distribution of Activities” In Modern

Urban and Regional Economics. Oxford, UK: Oxford University
Press.

Skaburskis, A., & Moos, M. (2010). “The Economics of Urban Land” In

Canadian Cities in Transition (T.E. Bunting, P. Filion, & R.C. Walker (eds.)). New York: Oxford University Press.