Housing & Urban Development

Fourth Lecture

Contents

Demand for Residential Land

Introduction
Land is a valuable resource that needs careful
management. Every planning authority (municipality
or planning district) is required to have a
development plan with policies generally consistent
with the Provincial Planning regulation to guide the
use of land. The planning should be in a way that the
designation of land should correspond to the
changing land needs of a community and not be
wasteful of land.

Demand for Residential Land

Introduction
After a community has an idea of future population growth or
loss, it can analyze what the implications of that future
population growth or loss will mean for land consumption.
Plans to manage growth need to include an accurate estimate
of land required to accommodate future growth.
The planning process should convert forecasts of population
and employment into requirements for land "need" or demand.
This conversion involves a variety of factors. It is necessary to
convert population forecasts into forecasts of households (both
single-family and multi-family) which the community will add
during the future planning horizon (often 10 or 20 years).

Demand for Residential Land

Introduction
The number of houses and other dwelling units that need to be
built is a better indication of future land needs than population.
Average household size (how many people per dwelling unit)
will be a determinant of how many houses are needed to house
the projected population growth. Household size will probably
vary by community. Generally, household size has declined
over the years.
Communities also need to calculate residential densities (how
many dwellings per acre). This figure will be different for
single-family and multi-family dwelling units. The density
figure will allow the community to project how much land will
be consumed to develop the projected growth in households.

Why to know demand for

Residential Land
A development plan should ensure a balance between
the amount of land designated for residential use and
the demand for lots. An adequate supply of
appropriately located and designated residential land
encourages orderly development in a strategic,
planned manner.

Why to know demand for

Residential Land
A residential supply and demand study will inform a
planning authority of the appropriate amount of land
that should be designated for residential use in the
short-term (five to 10 years) and longer-term (15 or
more years) planning horizons..

How to know Demand for

Residential Land
Demand for Residential Land is mainly dependent on
Two factors
Population
Housing Types

Population
Population Estimates and Trends
Information regarding population estimates & trends
will help in estimating the future demand for
residential land.
The first step is to determine the target population
that the development plan seeks to accommodate.
So in order to determine population initially we have
to identify the population of the planning area for the
last four census reporting periods.

Population
Census Year

Census Year

Census Year

Census Year

Population

Population

Population

Population

After having above data now following questions

should be answered.
What is the past and current population?
Has the population been increasing or decreasing?
How much has the population changed?

Population
What factors have contributed to this change?
So the factors which are affecting Population Change could be
Birth rate
Migration
Improved Health Facilities

Population
The next thing in population estimation is to
determine the average increase in population per year.
Five Year
Avg

Five Year
Avg

Population
Per Year

Population
Per Year

Population
Affect of Development opportunities on Population
After having average population figure now we have
to identify development opportunities occurring on,
or within close proximity to, the borders of our
planning area.
What is the nature of the development (type and
size)?
What effect will it have on the residential demand in
the planning area?

Population
Future Population Estimates
Provide a range of estimates to cover a range of
scenarios from the most optimistic (highest growth)
to the pessimistic (low growth).
Population
Projected In..
5 years
10 years
10 years
10 years

Low

Medium

High

Population
Future Population Estimates
What major factors in the planning area or the region will influence the
population (increase or decrease) in the future? (Ex: large infrastructure project,
increasing immigration rates, natural population growth, economic downturn,
large employer layoffs or shutdown.
How is the population changing? What are the demographic trends?
Are there more or less school-aged children, working age people or
retirees?
What is the median age of the population? Has it changed from the last
census period?
Are the people living in the area long time residents or do they move in
and out more frequently?
What is the ratio of home owners to renters? Has this changed over time?
Compare the age profile of the population from the most current census
year to the census year five years previous. Have there been any
changes? What are the trends?)

HOUSING TYPES
ASSESSING HOUSING TRENDS
Answering these questions will provide information on the type
of housing demanded and any residential construction trends in
the planning area.
Along with population information, this may provide insight
into the land requirements necessary to accommodate various
types and forms of residential development both now, and in the
future.

HOUSING TYPES
ASSESSING HOUSING TRENDS
List the number of new dwelling building permits for at least the
last 10 years or since the last development plan was adopted, by
type (see example below).

HOUSING TYPES
ASSESSING HOUSING TRENDS
Is the number of building permits increasing or decreasing?
What are the five year and 10 year averages?
What factors have contributed to this increase or decrease? What
factors may cause an increase or decrease in building permits in
the future?
To get an idea of the development pressures in the planning area,
how many residential subdivision applications were received
since the current development plan was adopted?
How many and what type (ex: urban residential, rural
residential, farmstead) of lots were applied for?.

HOUSING TYPES
ASSESSING HOUSING TRENDS
How many of each type of residential lot have been approved
since the current development plan was adopted?
Lots less than 15,000 square feet
Lots between 15,000 square feet and one acre
Lots between one and two acres
Lots between two and five acres
Lots greater than five acres?.

Factors need to be considered for

supply of housing type
Sir need ur kind guidance in this section
As per my knowledge factors might be
Level of income
Location
Incentives
Standards etc

How to know the type of Housing

Demand & Land requirement
The population and housing profiles developed for
the planning area can now be used to estimate the
type and amount of housing required in the future.
The profiles can also be used to estimate the amount
of residential land required to accommodate this
demand.
The two important questions that should be answered
at this stage
Anticipated demand for various housing types?
How many of each dwelling unit type will be required in
10 years? 20 years?

How to know the type of Housing

Demand & Land requirement
Analysis of demographic trends of any settlement
may reveal a future preference or need for a certain
type of dwelling unit.
For instance, an aging population may be an indicator
of a future demand for seniors apartments.
To accommodate this trend, a planning authority may
consider increasing the number of multi-family
dwelling units and decreasing household size in the
analysis.

How to know the type of Housing

Demand & Land requirement
Analysis of socio economic trend of any settlement
may also help in determining the type of housing
demand.
If the income level in a certain area is less so the
future housing demand of that particular locality
would be totally different from a high income area.
Some time the planning guidelines also provide help
in the allocation of future housing type i.e. As per
NRM in every housing schme minimum 20% of the
plots should be reserved for low income & sizes of
those plots shouldnt be greater than 5 Marla.

How to know the type of Housing

Demand & Land requirement
Land Calculation
After having the information that how much percentages
we have to dedicate for different types of houses , the
calculation of land is very easy then.
For example if we came to know that in a certain locality
we have to provide 40% of plots to a low income people .
The next step is simply to decide the sizes of those low
income plots according to certain criteria's.
Sum of all will give total land required for that particular
segment of society
Similarly we can do calculation for Medium & high
income population.

Factors Affecting Demand of

Housing
Demand for Housing depends on various factors
Affordability. Rising incomes mean that people are
able to afford to spend more on housing. During
periods of economic growth, demand for houses tends
to rise. Also demand for housing tends to be a luxury
good. So a rise in income causes a bigger % rise in
demand.

Factors Affecting Demand

Population.
A very important factor. It is not just the number of
people but demographic changes. e.g. growing
number of single people living alone has led to
increasing demand for houses.

Housing situation in developing

countries
Effective Demand.
Another factor that determines the effective demand
for houses is the willingness of banks to lend
mortgages. If banks give mortgages with bigger
income multiples, then the effective demand for
houses is greater

Factors Affecting Demand

Confidence.
Demand for houses depends on consumer confidence.
In particular it depends on peoples confidence about
the future of the economy and housing market. If
people expect prices to rise, demand will rise so
people can gain from rising wealth. In a boom,
demand for houses rises faster than incomes as seen
in graph above

Factors Affecting Demand

Interest Rates.
Interest rates play a big factor in determining the
cost of mortgage interest repayments.

Example
When interest rates reached 15% in 1992, demand
for housing collapsed, causing a large fall in demand
for housing. The relatively low interest rates of the
90s and 2000s, encouraged more to buy a house.

Factors Affecting Demand

However, in 2008-09, interest rates were cut to
0.5%. Even though interest rates were very low,
demand also remained low. This was because,
other factors were reducing demand for housing
like the recession and prospect of rising
unemployment.

References
Will be added in final copy

Things to be covered in next lecture

Why to know supply of residential land & Housing demand.
Factors to be considered for supply of residential land
How to estimate existing supply of residential land
Factors to be considered while designating new areas for Housing?
Few other factors which should be kept in mind while calculating
future housing demand like Migrations & Obsolete factors
Example of Housing calculation