“How does the pattern of land use determine the types of property to be found in an area and their values”?
Land in a sense has no value of itself, but for the right to which the land can be put. Improving the use rights in land will generally lead to an increase in value. Land can be zoned for residential-, commercial-, industrial, agricultural and several other uses. Normally, the extent or magnitude to which a property will be developed is dictated by the demand for such a utility. This is also known as the highest and best use of a particular approved right in the land.
Ownership is the most comprehensive right which a person can have over a property. An owner has the right to take the fruits derived of a property. Fruits in this sense can mean rental income from vacant land storage, tenants in an improved building, advertising signage, and such like. It can also mean the harvesting of primary agriculture (wheat, citrus, timber, and such like) and minerals rights. In the case of ownership, the horizontal layers of land cannot be owned separately. The owner may grant a right to prospect the minerals found in his property, but until the minerals are physically removed it belongs to the owner of the land.
At this point it must be emphasized that a right in property can be granted for a certain use, but this could be legally held in the personal name or capacity of the landowner. This means that the landowner can sell the property without the transfer of the right of use, thus the new owner of the property must re-apply for that particular right. A typical example of such a right is the “right to sell liquor”.
Unimproved land values can be determined by means of a unit of measure, say per square meter of a proposed building to be developed. The shape, gradient and the location of the land will either contribute or diminish the value of the property. For instance, a steep gradient means increased development cost, but can be contributing toward the views and subsequently the value of the property. Local knowledge of the property market and the affordability of the targeted investors or buyers are essential to the effective planning of any development. A dysfunctional or marginal development can reduce the land value to below the market value, even less than when it was vacant and similarly the land value can increase with an optimal development.
Agricultural land values are based on the quality of the soil, the gradient (contributing to various factors such as harvesting techniques and associated costs). However, land without registered and approved water rights are generally deemed of a lesser value than land with water rights.
Land is limited as a resource, a general trend for redundant and dated urban areas are the revitalisation of existing structures through higher density and mixed use developments. Mixing residential, commercial (offices), recreational (e.g. shopping centres) and community (e.g. schools) uses, creates a work, live and play environment. Travelling to work is minimised and healthier and self-governing communities evolve. This is a typical case in favour of urbanisation of areas which is continually subject to changes in use patterns and as a result in value.
Although not exhaustive, hopefully this can serve as a partial answer to the question of how does the pattern of land use determine the types of property to be found in an area and their values?