Residential land values and the decentralization of jobs

The land-value surface in suburban Washington, D.C., changed dramatically o ver the decade of the 1980s. This article explains these changes in terms o f the decentralization of jobs versus socioeconomic trends. Contemporaneous correlation among selected variables needs to be controlled with reduced f orms and SES techniques. But all explanatory variables except distance from some unchanged point are determined simultaneously. Predetermined variable s control for this double-endogeneity issue. Land values in 1990 have a U-shape with respect to distance from the U.S. C apitol Building after controlling for other variables. The data indicate th at this is the result of demographic changes rather than the development of suburban employment nodes: polycentric SUE theory is rejected. Land values are an increasing function of lagged land values, a decreasing function of work at home. Moreover, work at home is attracted by low structural densit y and high socioeconomic status as well as low land values. This supports t he argument that demographics and technological innovations have shaped the land-value surface; baby boomers are seeking low-density housing for work and family life.