Urban Spatial Variations in Office-Commercial Rents: The Role of Spatial Amenities and Commercial Zoning

Abstract

The paper argues that traditional bid-rent modeling is inadequate in providing the framework for empirically analyzing the whole array of location demand and, most importantly, supply-side influences on office-commercial rents within multinodal metropolises. The analysis then proceeds with an alternative modeling scheme, setting the stage for specifying long-run reduced-form office-commercial rent functions differing from traditional hedonic formulations both within competitive and constrained land market settings. Using recent data on office-commercial rents across nodes in Greater Los Angeles, the empirical analysis lends considerable support to those alternative model specifications accounting not only for firm amenities, but also for worker amenities and local institutional controls.