# **II. LAND** ALLOCATION **IN** CITIES WITHOUT MARKETS

In Soviet Russia, and other socialist cities as well, administrative decisions based on "needs" and norms govern the use and quantity of land consumed. By contrast, in a market economy, land price differentials constitute the most important factors determining quantity and location<sup>of land</sup> consumed. These divergent principles governing land allocation and land use could be expected<sup>to</sup> produce different spatial and efficiency outcomes. A quantitative land use analysis of Moscow<sup>and St.</sup> Petersburg reveals that there are indeed major differences between Russian cities<sup>and market economy</sup> cities in the distribution and consumption of land.<sup>2</sup> Inspection of land use maps or satellite photos of other Russian cities confirms that these are systemic features of the socialist city.<sup>3</sup>

## **A. Absence of Incentives to Recycle Land in Soviet and Other Socialist Cities**

As their economy and their population grow, cities expand through the progressive addition of concentric rings, similar to the process for trees in successive growing seasons. New rings are added to the periphery as the city grows. Within each ring, land use reflects the combined effects<sup>of</sup> demography, technology, and the economy at the time when the ring was developed. While this organic incremental growth is common to all cities, in a market city changing land prices exert<sup>their</sup> pressure simultaneously in all areas of the city, not just at the periphery. Land prices exert a powerful influence to recycle already developed land in the inner rings when the type and intensity of the existing use is too different from the land's optimuLm economic use. Thus, changing land values bring a built-in urban dynamistn as continuous variations in land prices trigger land use changes by putting<sup>a</sup> constant pressure on the existing uses of land.

By contrast, under Russia's command economy, the absence of land prices removed all incentives to redevelop built-up areas. Once land was allocated, it was almost never recycled. Without price signals, it was administratively simpler to respond to current land demand pressure by developing 2 The methodology used is based on the measurement of population density in the built-up area, i.e. the population within two concentric rings at I km interval divided by the built-up area within this interval. This built-up area does not include large parks, physical obstacles to land use such as rivers and lakes, and any undeveloped<sup>area.</sup> These densities are derived from digitaized land use maps, satellite photographs and detailed databases related to land uses by type of users. These data bases are routinely maintained by local urban planning offices. The geocoded data was analyzed with a graphics-based GIS software.

3 In Chinese cities, however, the socialist land use system has a much shorter and more recent history than Russia. Also, Russia has completed its urbanization but China is just entering its phase of most massive<sup>urban</sup> growth. As a result, the historical Chinese urban core which was developed under a market economy has kept a much larger relative importance than in Russia. Moreover, in China, the absence of large urban infrastructure and public transport investment plus severe underinvestment in housing between 1949 and 1979 has led to more compact cities and reinforced the population density at the center. But now, under the rapid urban investment of the last decade, administrative processes operating without land markets are again generating outcomes similar to those of Soviet cities: new residential floor area ratios follow the Russian pattern and are higher in the periphery than in the center. (For more comparative data, see Bertaud, 1994).

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