Real Estate Development Fundamentals Worksheet

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Boston Metropolitan Area City Abington Acton Amesbury Andover Arlington Ashland Avon Bedford Bellingham Belmont Beverly Billerica Bolton Boston Boxborough Boxford Braintree Bridgewater Brockton Brookline Burlington Cambridge Canton Carlisle Carver Chelmsford Chelsea Cohasset Concord Danvers Dedham Dover Duxbury East Bridgewater Easton Essex Everett Foxborough Land Area (sq.mi) 9,95 19,98 12,41 31,01 5,18 12,45 4,38 13,74 18,50 4,66 15,44 25,89 19,93 48,42 10,37 23,97 13,89 27,49 21,47 6,79 11,81 6,43 18,94 15,36 37,55 22,65 2,19 9,89 24,92 13,28 10,45 15,33 23,76 17,24 28,44 14,16 3,38 20,08 Distance to CBD 18,496 21,436 35,667 21,1 6,268 21,726 15,786 14,347 28,4 6,615 16,589 17,482 28,485 0 25,588 21,182 9,914 25,846 19,144 3,653 12,278 3,327 14,525 18,916 36,245 22,262 2,669 15,396 16,373 16,374 9,746 13,832 29,57 23,068 23,368 23,62 3,473 22,919 1970 Population 12.334 14.770 11.388 23.695 53.524 8.882 5.295 13.513 13.967 28.285 38.348 31.648 1.905 641.071 1.451 4.032 36.050 11.829 89.040 58.689 21.980 100.361 17.100 2.871 2.420 31.432 30.625 6.954 16.148 26.151 26.938 4.529 7.636 8.347 12.157 2.670 42.485 14.218 1990 Population 13.817 17.872 14.997 29.151 44.630 12.066 4.558 12.996 14.877 24.720 38.195 37.609 3.134 574.283 3.343 6.266 33.836 21.249 92.788 54.718 23.302 95.802 18.530 4.333 10.590 32.383 28.710 7.075 17.076 24.174 23.782 4.915 13.895 11.104 19.807 3.260 35.701 14.637 Framingham Franklin Georgetown Gloucester Groveland Halifax Hamilton Hanover Hanson Harvard Haverhill Hingham Holbrook Holliston Hopedale Hopkinton Hudson Hull Ipswich Kingston Lakeville Lawrence Lexington Lincoln Littleton Lowell Lynn Lynnfield Malden Manchester Mansfield Marblehead Marlborough Marshfield Maynard Medfield Medford Medway Melrose Merrimac Methuen Middleborough Middleton Milford 25,12 26,74 12,94 25,97 8,94 15,87 14,60 15,61 15,02 26,36 33,33 22,47 7,35 18,71 5,15 26,56 11,51 2,97 32,61 18,53 29,90 6,97 16,40 14,37 16,62 13,78 10,81 10,15 5,09 7,84 20,46 4,53 21,09 28,46 5,24 14,51 8,14 11,45 4,70 8,53 22,41 69,56 13,97 14,60 19,036 25,69 25,607 27,004 27,845 27,363 20,771 21,19 21,657 28,452 28,917 11,866 14,308 21,646 29,26 25,326 25,984 8,695 24,838 30,484 35,906 24,677 10,423 13,321 26,203 23,087 9,375 12,505 4,623 21,231 23,919 14,227 25,181 25,876 20,577 17,295 4,78 22,857 6,926 32,8 26,307 33,08 16,524 27,839 64.048 17.830 5.290 27.941 5.382 3537 6.373 10.107 7.148 12.536 46.120 18.845 11.775 12.069 4.292 5.981 16.084 9.961 10.750 5.999 4.376 66.915 31.886 7.567 6.380 94.239 90.294 10.826 56.127 5.151 9.939 21.295 27.936 15.223 9.710 9.821 64.397 7.938 33.180 4.245 35.456 13.607 4.044 19.352 64.989 22.095 6.384 28.716 5.214 6526 7.280 11.912 9.028 12.329 51.418 19.821 11.041 12.926 5.666 9.191 17.233 10.466 11.873 9.045 7.785 70.207 28.974 7.666 7.051 103.439 81.245 11.274 53.884 5.286 16.568 19.971 31.813 21.531 10.325 10.531 57.407 9.931 28.150 5.166 39.990 17.867 4.921 25.355 Millis Milton Nahant Natick Needham Newbury Newburyport Newton Norfolk North Andover North Reading Norton Norwell Norwood Peabody Pembroke Plymouth Quincy Randolph Raynham Reading Revere Rockland Rockport Rowley Salem Salisbury Saugus Scituate Sharon Sherborn Somerville Southborough Stoneham Stoughton Stow Sudbury Swampscott Taunton Tewksbury Topsfield Wakefield Walpole Waltham 12,16 13,04 1,24 15,09 12,61 24,25 8,38 18,06 14,84 26,67 13,26 28,71 20,88 10,48 16,40 21,85 96,48 16,79 10,07 20,50 9,93 5,92 10,02 7,07 18,72 8,10 15,43 10,99 17,18 23,31 15,96 4,11 14,15 6,14 16,04 17,62 24,37 3,05 46,62 20,72 12,66 7,47 20,53 12,70 20,179 7,502 8,599 15,702 10,261 32,755 32,767 7,783 21,395 23,852 15,021 27,871 19,245 13,406 13,499 23,641 34,22 7,881 13,582 28,354 11,71 4,234 17,39 30,416 26,454 13,912 34,943 7,786 20,457 17,343 17,886 2,862 24,047 8,658 16,288 23,418 18,298 10,646 31,746 19,588 20,116 10,264 17,863 9,074 5.686 27.190 4.119 31.057 29.748 3.804 15.807 91.263 4.656 16.284 11.264 9.487 7.796 30.815 48.080 11.193 18.606 87.966 27.035 6.705 22.539 43.159 15.674 5.636 3.040 40.556 4.179 25.110 16.973 12.367 3.309 88.779 5.798 20.725 23.459 3.984 13.506 13.578 43.756 22.755 5.225 25.402 18.149 61.582 7.613 25.725 3.828 30.510 27.557 5.623 16.317 82.585 9.270 22.792 12.002 14.265 9.279 28.700 47.039 14.544 45.608 84.985 30.093 9.867 22.539 42.786 16.123 7.482 4.452 38.091 6.882 25.549 16.786 15.517 3.989 76.210 6.628 22.203 26.777 5.328 14.358 13.650 49.832 27.266 5.754 24.825 20.212 57.878 Wareham Watertown Wayland Wellesley Wenham West Bridgewater West Newbury Westborough Westford Weston Westwood Weymouth Whitman Wilmington Winchester Winthrop Woburn Wrentham 35,79 4,11 15,24 10,18 7,72 15,74 13,52 20,52 30,61 17,02 10,97 17,01 6,96 17,14 6,04 1,99 12,68 22,20 44,73 6,349 15,424 12,654 34,326 23,634 30,858 29,121 24,61 12,452 13,074 11,323 20,243 14,25 7,599 4,098 9,602 24,418 11.492 39.307 13.461 28.051 3.849 7.152 2.254 12.594 10.368 10.870 12.750 54.610 13.059 17.102 22.269 20.335 37.406 7.315 19.232 33.284 11.874 26.615 4.212 6.389 3.421 14.133 16.392 10.200 12.557 54.063 13.240 17.651 20.267 18.127 35.943 9.006 Source: 2007 data come from the Massachusetts Government's Dept of Health and Human Services, and the De 2000 Population 2007 Population 14.605 20.331 16.450 31.247 42.389 14.674 4.443 12.595 15.314 24.194 39.862 38.981 1.148 589.141 4.868 7.921 33.828 25.185 94.304 57.107 22.876 101.355 20.775 4.717 11.163 33.858 35.080 7.261 16.993 25.212 23.464 5.558 14.248 12.974 22.299 3.267 38.037 16.246 16.365 20.753 16.429 33.284 41.144 15.796 4.303 13.146 15.908 23.356 39.198 42.038 4.481 599.351 5.097 8.074 34.422 25.514 93.092 54.809 25.034 101.388 21.916 4.882 11.547 34.128 38.203 7.182 16.840 26.736 24.132 5.627 14.444 13.879 22.969 3.323 37.269 16.298 1967 Employment 2027 2356 3332 11123 6008 4555 1615 12198 1276 3905 10502 3621 440 372.306 120 171 12301 3113 30784 12560 10375 92475 5675 264 195 3855 10056 1186 6634 8873 9084 463 800 1736 1879 404 13515 5552 1990 Employment 3.306 9.395 4.399 24.873 9.153 4.075 4.975 24.620 2.949 6.877 15.406 20.009 1.471 537.664 2.286 695 29.610 5.061 38.584 18.123 33.103 103.278 19.068 649 1.299 15.065 9.670 2.024 11.643 22.291 14.050 620 2.256 3.377 5.855 1.089 12.086 8.506 2000 Employment 4.203 11.091 4.773 34.258 8.607 4.464 6.858 20.170 5.028 6.315 18.963 26.626 2.388 583.955 2.248 906 31.666 7.211 37.737 16.434 39.350 115.625 20.978 905 1.920 22.801 13.124 2.354 12.944 22.170 14.965 828 2.601 3.418 9.344 1.459 10.407 9.469 66.910 29.560 7.377 30.273 6.038 7.500 8.315 13.164 9.495 5.981 58.969 19.882 10.785 13.801 5.907 13.346 18.113 11.050 12.987 11.780 9.821 72.043 30.355 8.056 8.184 105.167 89.050 11.542 56.340 5.228 22.414 20.377 36.255 24.324 10.433 12.273 55.765 12.448 27.134 6.138 43.789 19.941 7.744 26.799 64.786 31.381 8.147 30.308 6.923 7.700 8.188 13.966 9.956 6.001 59.902 22.394 10.663 13.941 6.165 14.307 19.580 11.067 13.245 12.339 10.587 70.066 30.332 7.994 8.714 103.512 87.122 11.382 55.712 5.265 22.993 20.039 38.065 24.576 10.177 12.266 55.565 12.749 26.782 6.425 43.979 21.245 9.347 27.263 24925 2353 935 7915 418 197 721 2948 1370 445 15754 3873 1518 1459 3335 889 2870 1023 2330 983 503 30867 5680 635 1722 34955 43992 1615 15914 716 2042 2771 5690 1097 3918 1693 15918 994 6161 391 4582 3496 969 4620 39.047 7.156 1.483 11.268 822 683 1.237 6.569 1.706 1.004 17.378 9.730 3.035 4.209 1.526 3.900 8.381 1.085 3.082 4.656 1.940 23.417 19.411 1.671 5.342 40.116 29.682 3.337 19.076 1.266 8.771 4.498 20.531 4.201 7.403 3.509 19.513 1.796 6.082 718 13.482 6.612 2.489 11.181 45.892 15.794 2.434 12.383 1.095 1.098 1.399 7.118 1.839 1.039 19.160 11.727 2.782 5.146 1.726 5.983 9.647 1.320 3.927 5.318 2.960 23.626 21.513 1.875 6.189 34.694 25.214 5.055 17.515 1.584 12.340 5.109 28.869 4.890 4.962 3.483 20.270 2.750 6.545 957 14.170 7.731 4.927 13.772 7.902 26.062 3.632 32.170 28.911 6.717 17.189 83.829 10.460 27.202 13.837 18.036 9.765 28.587 48.129 16.927 51.701 88.025 30.963 11.739 23.708 47.283 17.670 5.606 5.500 40.407 7.827 26.078 17.863 17.408 4.200 77.478 8.781 22.219 27.149 5.902 16.841 14.412 55.976 28.851 6.141 24.804 22.824 59.226 7.927 25.691 3.519 31.975 28.263 6.926 17.144 83.271 10.646 27.637 14.021 19.222 10.271 28.172 51.441 18.595 55.188 91.622 30.168 13.641 23.129 55.341 17.780 7.633 5.839 40.922 8.521 27.192 17.881 17.033 4.217 74.405 9.484 21.508 26.951 6.327 17.159 13.994 55.783 29.607 6.067 24.706 23.086 59.758 1017 2807 292 13239 12365 306 3658 35398 885 13521 1249 1924 776 11738 14379 779 4280 38022 5155 1225 3559 5995 3729 997 529 19647 1005 5322 1497 1372 229 19745 932 5235 4771 307 3606 1814 14068 3168 926 9428 5670 43877 2.124 5.128 496 19.331 18.449 914 8.256 44.793 2.373 16.758 3.454 4.066 5.511 22.927 21.692 3.832 16.066 39.938 9.692 4.503 6.060 8.176 6.643 1.344 1.446 20.191 1.995 9.875 2.906 2.882 551 20.136 4.097 8.107 13.192 2.260 9.706 2.747 19.882 9.489 1.779 10.904 7.598 63.087 2.186 6.051 367 24.156 18.310 1.141 10.149 48.105 3.033 19.271 6.326 6.112 8.461 24.639 27.056 5.280 19.100 47.227 10.421 6.890 7.455 8.776 8.146 1.451 2.394 18.051 2.771 11.128 2.987 3.417 522 23.220 6.277 8.032 12.452 2.211 6.491 3.432 24.319 17.262 2.896 15.078 9.608 64.851 20.335 32.986 13.100 26.613 4.440 6.634 4.149 17.997 20.754 11.469 14.117 53.988 13.882 21.363 20.810 18.303 37.258 10.554 21.154 32.521 13.017 26.985 4.615 6.679 4.269 18.459 21.790 11.698 14.010 53.272 14.385 21.679 21.137 20.154 37.042 11.116 1891 18809 3983 6308 345 1054 356 4338 1845 1770 2215 7498 3362 6926 3923 1906 11234 3661 5.621 17.178 3.286 18.203 661 4.922 502 18.036 5.565 2.928 9.157 14.653 2.843 19.771 6.729 2.986 35.608 4.268 h and Human Services, and the Dept of Labor and Workforce Development 6.605 19.616 3.884 19.263 1.187 6.902 704 25.050 11.484 3.003 10.541 16.828 2.951 21.736 7.635 2.472 41.212 4.887 2007 Employment 4.023 10.089 4.709 32.440 7.997 4.994 5.420 18.135 5.636 6.394 21.129 22.867 1.527 562.720 3.834 947 28.204 7.757 38.026 14.279 38.146 107.730 23.451 768 2.777 21.229 13.348 2.499 12.808 25.289 14.869 812 2.871 2.720 9.669 1.282 12.761 10.333 45.646 16.227 2.351 10.838 1.175 1.326 1.468 7.063 1.624 1.064 18.207 11.955 2.741 5.337 1.668 8.934 10.405 1.338 4.233 5.761 3.341 23.274 19.161 1.759 5.018 33.353 23.024 5.757 15.261 1.680 11.193 5.027 30.387 5.518 5.130 2.896 18.123 3.429 6.278 688 15.214 8.895 4.601 15.264 2.216 5.402 508 23.588 19.831 1.520 10.638 47.480 2.859 13.718 7.825 6.211 8.433 24.803 24.665 6.235 23.042 46.826 8.008 8.623 6.063 9.384 8.073 1.389 2.721 18.426 2.772 10.584 3.307 3.665 655 21.451 7.105 7.771 13.628 2.336 8.141 3.505 25.887 15.628 2.248 14.599 10.533 54.404 8.462 19.079 3.248 17.645 1.410 5.956 753 24.811 11.879 3.667 9.436 18.592 3.192 19.289 8.518 1.985 38.837 6.337 University of Southern California Sol Price School of Public Policy red 362—Real Estate Development Fundamentals Spring 2020 Assignment 2 Professor: Jorge De la Roca Assignment due date is Thursday, February 27 at the beginning of class. All answers must be clearly explained. Answers may be either hand-written or typed, as long as they are clear and legible. Excel graphs should be as clear and descriptive as possible. Short questions (21 points) 1. (3 points) Classify the following as contributing to either localization economies or urbanization economies (or both), and provide a brief explanation of your reasoning. • Lots of good computer engineers in Silicon Valley • Frequent flights between Newark Airport and Los Angeles • A Kinko’s near University of Southern California 2. (4 points) Consider two cities, Flexville and Rigid City, that have the same equilibrium wage and the same equilibrium total employment. The export industries in the two cities produce the same good. In Flexville, export firms produce with variable factor proportions—that is, they can easily adjust the amount of labor in response to changes in the wage, i.e., the price of labor. In Rigid City, export firms produce with fixed (or less variable) factor proportions, meaning it is quite difficult to change the amount of labor. Suppose that both cities find a way to increase the quality of residential public services (e.g. public schools, parks, libraries) without increasing taxes. Use two supply-demand graphs, one for each city, to show the effects of the improvements in public services on • equilibrium employment • the equilibrium wage 3. (3 points) In a 1989 report, a consulting firm estimated the economic impacts of moving the Los Angeles Raiders (a professional football team) to Sacramento. The authors predicted that people would spend $28 million per year on the team (tickets, food, merchandise, and parking). (You can assume this is a reasonable estimate.) The consulting firm then used an economic multiplier of 2.2 to arrive at their estimate of the total economic impact of the Raiders on the city of Sacramento—$61.6 million per year. What implicit assumptions have they made in their analysis? Provide a brief assessment of their conclusion. 4. (2 points) Suppose you operate a small manufacturing firm in Santa Monica and you recently developed a unique, new production process that will allow your shop to earn $500 more per month in profit. Your landlord hears about this and smiles since she remembers from her real estate class that all economic development benefits accrue to landowners. She says, “since the supply of land is inelastic (e.g. very steep), you will now have to pay me $500 more per month in rent.” Is your landlord correct? Explain. 5. (3 points) There is some evidence that people have become more sensitive to air pollution. If this is true, what influence may it have on wages in different cities, and how will it likely affect the location decisions of firms? 6. (4 points) How would you expect the division of land between office firms and manufacturing firms—and their relative locations—to change if per unit freight costs decline (that is, it becomes cheaper to ship manufacturing goods)? Use a single bid-rent diagram to illustrate your answer. 7. (2 points) Suppose a city restricts the heights of residential structures. The maximum height is four stories, the height that would normally occur at a distance of five miles from the city center. Draw two residential bid-rent curves on the same graph, one for the city in the absence of height restrictions and one with height restrictions. Analysis of suburbanization in Boston (14 points) This exercise requires you to examine suburbanization patterns in the Boston metropolitan area. Using real world data, you will study how the density of population and employment in Boston area towns change as one moves away from the Boston central business district (cbd) and to examine how these patterns changed between 1970 and 2007. The required data are posted on Blackboard in an Excel file. The data set includes the population and employment of municipalities in the Boston metropolitan area in 1970, 1990, 2000, 2007, as well as their land area and distance to the cbd. (Note that the employment figures are for 1967, 1990, 2000, and 2007.) • Calculate the population and employment density for each town in 2007 and plot these densities against distance from the central business district (cbd). Specifically, use Excel to create two different xy-scatterplot graphs (using the Excel Chart tab). Distance to Boston (the cbd) should be on the x-axis and the density measure should be on the y-axis (population density in 2007 and employment density in 2007). Note that density is defined simply as (population divided by land area) and (employment divided by land area). Excel help: To create a scatterplot in Excel, the density data must be immediately to the right of the “distance from cbd” column. First create new columns and calculate four density measures for each town in the Boston metropolitan area. Then, you can add two columns for the distance data—one immediately to the left of each density column. Then highlight the data included in a single pair of distance-density columns and click on the Excel Chart tab and then pick a type of scatterplot. At the bottom of the assignment, I have included a sample graph for population in 1970 in the Boston metro area to give you an idea of what the end product should look like. • After producing these graphs, please answer the following questions: 1. (2 points) Do the graphs generally appear consistent with the predictions of location theory, or the traditional urban model? Why or why not? (Again, take Boston to be the cbd.) 2. (1 point) Why should population density be higher nearer to the cbd? 3. (1 point) Are there any notable outliers in the data? Be specific. What might explain their unusual patterns? 2 • Population 4. (1 point) How many people lived in towns within 15 miles of Boston in 1970, 1990, 2000, and 2007? 5. (1 point) How many people lived in towns more than 15 miles away from Boston during these four years? (Creating a table like the one below may help.) 1970 1990 2000 2007 < 15 miles > 15 miles Total 6. (1 point) What was the percentage change in the population living within 15 miles of Boston during 1970-1990 and from 1990-2007? 7. (1 point) What was the percentage growth in the population living more than 15 miles away from Boston during these two time periods? • Employment 8. (2 points) In 1967, 1990, 2000, and 2007, how many jobs were there in towns within 5 miles of Boston, between 5–10 miles away, between 10–15 miles away, and beyond 15 miles? 1967 1990 2000 2007 < 5 miles 5–10 miles 10–15 miles > 15 miles Total 9. (1 point) What was the percentage change in employment that occurred within each of these four distance bands from 1967–1990, and from 1990–2007? • (3 points) Analysis – What can you say generally about suburbanization in Boston during these two time periods? – How do changes between 1967/1970 and 1990 compare to the changes that occurred between 1990 and 2007? – Is the pace of suburbanization similar during each time period? 3 Sample graph 4
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Attached.

Boston Metropolitan Area

City
Abington
Acton
Amesbury
Andover
Arlington
Ashland
Avon
Bedford
Bellingham
Belmont
Beverly
Billerica
Bolton
Boston
Boxborough
Boxford
Braintree
Bridgewater
Brockton
Brookline
Burlington
Cambridge
Canton
Carlisle
Carver
Chelmsford
Chelsea
Cohasset
Concord
Danvers
Dedham
Dover
Duxbury
East Bridgewater
Easton
Essex
Everett
Foxborough

Land
Area
(sq.mi)
9.95
19.98
12.41
31.01
5.18
12.45
4.38
13.74
18.50
4.66
15.44
25.89
19.93
48.42
10.37
23.97
13.89
27.49
21.47
6.79
11.81
6.43
18.94
15.36
37.55
22.65
2.19
9.89
24.92
13.28
10.45
15.33
23.76
17.24
28.44
14.16
3.38
20.08

Distance
to CBD

18.496
21.436
35.667
21.1
6.268
21.726
15.786
14.347
28.4
6.615
16.589
17.482
28.485
0
25.588
21.182
9.914
25.846
19.144
3.653
12.278
3.327
14.525
18.916
36.245
22.262
2.669
15.396
16.373
16.374
9.746
13.832
29.57
23.068
23.368
23.62
3.473
22.919

1970
Population

12,334
14,770
11,388
23,695
53,524
8,882
5,295
13,513
13,967
28,28...


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