The Property Market and Urban Competitiveness: A Review

This paper examines the role of the property market in determining urban competitiveness. For these purposes, urban competitiveness is taken to mean the ability of a city to exploit or create comparative advantage, and thereby to generate high and sustainable economic growth relative to its competitors. The property market describes the institutional arrangements through which real property is used, traded and developed, and the wide range of actors involved in these processes. It seems clear that the property market will in ̄ uence urban competitiveness directly through the provision of suitable accommodation for economic activity and indirectly through its cumulative contribution to the built environment (D’ Arcy and Keogh 1997a). However, the majority of research on urban competitiveness has ignored or downplayed the role of the property market. This paper reviews a diverse and emerging property market literature in an attempt to identify its implications for urban competitiveness, and to formulate a workable analytical approach for the integration of property market and urban economic theory in the promotion of competitive urban development. Interest in urban competitiveness has grown rapidly in recent years. The burgeoning research effort has been multidisciplinary and wide-ranging, attracting contributions from both policy-makers and academics (see, for example, CEC, 1992, 1997; Cheshire and Gordon, 1995, 1996; Jensen-Butler et al., 1997; Oatley, 1998; Porter, 1995; Scott and Soja, 1996). These studies have highlighted the importance of issues such as industrial structure, technological innovation, entrepreneurship, governance, policy action, and even architecture and art, as key determinants of urban competitiveness. They have ranged in coverage from discussions of the broad process of competition between cities (Cheshire and Gordon, 1995, 1996; JensenButler et al., 1997) to the speci® c determinants of inner-city competitive advantage (Porter, 1995). While most research has avoided any detailed consideration of its role, some recent work has begun to explore the property market as a potentially important factor in shaping urban competitive advantages, economic growth and development outcomes (Ball, 1986, 1994, 1996; Carbonaro and D’ Arcy, 1993; D’ Arcy and Keogh, 1997a, 1998; Fainstein, 1993; Garreau, 1991; Healey et al., 1992; van der Krabben, 1995).

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