Introduction

A theory is a story about how some (usually small) part of the world works. It’s an explanation. The theories covered in this module attempt to explain how development works…how, why, where and when it happens. Our theories posit that development does not “just happen.” It is not a random occurrence, but rather a logical one that can be broken down into its component parts and explained.

Readings

We start with a theory associated with geographer David Harvey. Harvey viewed development as the result of capital accumulation. He thought capital, combined with labor, produced the necessary ingredients for development. The process is called Circuits of Capital, and your first reading is that entry in the Encyclopedia of Human Geography.

The second explanation focuses on property development as an investment. As an investment, the focus is on returns — the the financial returns to investment are high, more investment is attracted. When returns are low, resources for development flow into other sectors, and away from development.

Finally, we read about the “rent gap” theory. Simply stated a rent gap exists if there is a difference between the current rent a location earns that which it would earn if the property were to be redeveloped. When the gap is substantial enough, it attracts (re)development. These last two explanations are covered in Chapter 8 of Urbanization: An Introduction to Urban Geography. The chapter is accessible through CSU’s Electronic Course Reserve. Please read the sections on “Property, Location, Rent and Investment” on pages 190-194.