The Dynamics of Land Rents in Housing Submarkets: A Marxian Perspective

Abstract

This theoretical study delves into the dynamics of housing submarkets with the framework of Marxian land rents. It examines the relationship between residential spaces and the reproduction of labour power in terms of commuting and the differentiated quality of reproduction by submarket. This study shows that the differentiation process of venturing to create distinct spaces for surplus profit and the emulation process of copycatting spaces of higher rents consequently form multiple housing submarkets, each characterised by different land rents of monopoly, intra‐differential rent (intra‐DR) and inter‐differential rent (inter‐DR). The coexistence of these multiple layers of land rents, in turn, becomes a driving force propelling dynamic capital movements that seek to exploit rent gaps between the layers. To illustrate these concepts, the study reviews the case of high‐rise mixed‐use residential developments in Seoul, highlighting the dual dynamic processes through which land rents are pursued.

Bridging the Rent Gap: New Theoretical and Empirical Narratives

“…The first paper, authored by Joon Park, presents a combination of Marxian and bid‐rent approaches to explain ground rent formation across an entire city. Park's (2023) model is advantageous compared with the usually neighbourhood‐bounded rent gap studies available. His theory differentiates rent types in submarkets associated with distance to city centres as a differential rent creator and labour power as the value absorbed by developers.…”

“…Joon Park (2023, this issue) recalls that studies on land rent date back to Adam Smith and Marx, who stressed land rent as unearned value only due to land property (an idea further developed by Henry George). Meanwhile, Ricardo and Stuart Mill worked to reconcile the rent theory with the labour theory of value.…”