The Structure of Housing in Urban Settlements

Urban settlements can be characterised by a rent gradient which implies high rents on central lots. This will induce households who prefer to live at central locations to economize on land. At central lots households are therefore likely to live in apartments, while they at non-central lots closer to the urban fringe are more likely to live in detached houses. Within the model of an idealised monocentric city this can be shown to imply that the share of households living in detached houses will be smaller the larger the city is. In a topographically more complex city, the relationship between city size and the structure of the housing market is likely to be influenced also by the availability of land for housing. The less land there is available for housing, the smaller the share of detached housing is likely to be. Finally, the larger the share of single person households is, the more households are likely to live in apartments in block buildings. We use data for Norwegian urban settlements with a population above 10,000 for estimating a system of equations explaining the share of detached dwellings, apartments in block-buildings, etc. The empirical results show that size of the settlement and the share of single-person household have a strong impact on the structure of housing, but some settlements deviate substantially from the general pattern. We discuss why such deviations may occur, and argue that the results may be useful in urban planning and development.