Determining Land Values from Residential Rents

The value of land is determined by the locations’ attractiveness and degree direct use regulation. When regulations are binding, e.g., when a restriction on maximum floor area ratio exists, price can be directly expressed as function local amenities. We show theoretically empirically how this approach used to determine values from rental prices residential structures built upon that land. From our empirical results, we derive two main sources for monocentric structure prices. First, location centrally located dwellings makes more expensive. Second, high in central areas, regulation works multiplier inflates accordingly. Our model gives insights into determinants urban provides useful appraisal regions where transactions scarce.