Have you ever wondered how houses, shops and offices are located where they develop in a city? Because some are quite high in rate while others low-priced and if we talk about the way of living it will be higher as well respectively? This occurs because of the Bid Rent Theory. This idea helps us understand why land may be more expensive in one part of the world and less so in another.
The Bid Rent Theory is quite significant in AP Human Geography, a course focusing on the way humans occupy (live in) and organize space. Let us easily learn more about it!
The Basics of Why Land Prices Change
Imagine yourself in a vast city. The heart of the town is where all the big stores, High-rise buildings and many job offers happen. This is anyways where most people have to be as it will not only lie in the hearts of the city but also near work and shopping. But beyond the downtown core things start to change.
City Center: This is where you will find the most people, shops and simply life in general going on.
Suburbs: Next, we have the suburbs which are further away from central locations. They own more houses and fewer big buildings.
Countryside- This is the place further from the town where there are farms and lots of open space.
Of course, land is at a premium in the city center where everyone wants to be close to all the action. And as you go further out into the suburbs and country, land gets cheaper again because nobody wants to be there.
How the Bid Rent Theory Works
The Bid Rent Theory also explains you need to pay more money for land if one is closer to the city centre. That is because there would be greater competition for space in the city centre.
Here’s how it works:
For example, it caters to lots of businesses and people because the city centre is in high demand as everyone wants that convenience part. This high demand drives up the price of land. Think of a huge shopping mall or an office building with many floors – those have to be in a location where there are many people, and they get type more money for land.
Less Thirst for Suburbs and Countryside: Fewer businesses need to be located in the suburbs or countryside; so, land is more affordable there. Take houses with big yards or farms in the middle of spacious land; they don’t have to be situated downtown, so their lands are less costly.
So What Makes a Different Location Attract Multiple Types of Businesses?
Every business has different needs from their location How will the Bid Rent Theory Affect Them
Lastly, shops and things that people pay for to be attracted to them. Lots of People = Town Centre. All of these businesses want in on this prime real estate, so they are all going to have high bids (high offers) which means it will be expensive.
Very Frequent — Factories: This is where they make your things, so it needs to take up a lot of room, but you don’t have to stack it next door. Sure, they might not mind the suburbs — or hell rural areas where land is cheaper. They can then keep that money for the giants they wish to build.
HomesIf people live in a city they might build small apartments because the land is very expensive. They know that if they move off to the suburbs they can get a larger house for less money. This is the reason so many families choose to live out in suburbia.
Bid Rent Theory and City Shape
Understanding the City organization helps us with one of the theories called Bid Rent Theory. Let’s look at a typical city:
The CBD – Central Business District – This is the so-called heart of the city with all its big businesses and shops, where offices are situated. Everyone will want to be near the action land in Costa Rica costs an arm and a leg
The art galleries: For any fresh piece of artwork that you want to add a little flavour and colour to your house, head over towards the transitional zone where small businesses are exhibiting their wares apart from old houses and sometimes factories. This property is a little cheaper as it’s not close to the city centre.
The Residential Zone is where most people come to live. The land is less expensive because it’s further from downtown You could find homes in here, schools and parks.
Commuter Zone -Residents in this zone live further out but they travel to the city for work. We already live in a state where land is about as cheap (next to anywhere) and homes are larger-spaced houses.
The Significance of the Bid Rent Theory in AP Human Geography
The Bid Rent Theory is also relevant in AP Human Geography, where it helps to show how cities form and evolve with time. It also helps you understand why different parts of a city are the way they are and how some neighbourhoods become wealthy while others are willing to accept their status as poor.
Some Classic Examples of Bid Rent Theory
Let us know more about the Bid Rent demonstrated in spatially based models over two areas;
Manhattan: Land is more expensive in the middle of New York City than anywhere else because prices are extremely high for businesses and tourism. It is very expensive, and so only companies with serious money can be there. On the other hand, if you look downstate (beyond NYC) towards New Jersey or up in Upstate — hell yeah land is way cheaper than!
Downtown LA is home to a lot of businesses so land isn’t cheap in Los Angeles To them emphasizes Clark, “But if you go out for the suburbs — Pasadena or Santa Monica — then suddenly you start to see more homes and fewer tall buildings because land is so much cheaper here.
How is this NOT a Law of Geographical Reasoning, explained by the Bid Rent Theory?
The Bid Rent Theory is like a map, that explains to us why the City of cities got organized in this manner. First, it makes clear why there are such busy and expensive areas — as well as quieter cheaper ones. Not only does it provide a deeper understating of where, in the city people and businesses might choose to be as seen by AP Human Geography students.
This entire theory is about location and competition remember? The higher the transactions, or number of people who want to be in that place HIGHER THE PRICE paid Now when you walk around your city, remember that the Bid Rent Theory is influencing everything in sight!
