Land Subdivision Development Process and Main Actors

Lynch (1984:40–41) describes cities as being built and maintained by a host of agents:

families, industrial organisations, city bureaux, developers, investors, regulatory and subsidising agencies, utility companies and the like. Each city has its own particular interests and needs, producing cities of different types and kinds, and with different development processes and needs. The decision-making process itself is normally fragmented, diverse and characterised by the tendency to bargain and negotiate among stakeholders to reach agreement. Typically the primary agents are single-purpose actors, whose aim is to increase their revenue or profit margin in the completion of a sewer system for instance. The agents support the real-estate market, or maintain a taxation system, etc. These activities generate revenue that which helps sustain the city.

In North America the process of land subdivision development has evolved since the 1870s–80s when many real-estate entrepreneurs entered the subdivision business.

Subdividers’ work focused on purchasing acres of undeveloped land, such as agricultural land, on the fringes of the city. The developers would subdivide the land purchases, creating smaller building plots that were then made available for individual purchase. Building plots were sold either directly to prospective owner-residents, to

speculators interested in profitable resale, or to small builders. The results of this process were subdivisions of a poor quality (Weiss, 2002; Miles et al., 2007).

The subdivided plots consisted of little more than a few stakes in the ground, marking out property boundaries. The plots would not have graded and surfaced roads, landscaping, or any utility infrastructure. Most unimproved subdivisions did not include public improvements, which would have come after the sale of a plot for development.

The developments for public improvements would have been financed through special tax assessments for the new plot owners. The development process described here created a premature subdivision pattern (Weiss, 2002). During the 1920s and 30s, some of the larger subdividers began shifting their practice to include building. These developers would build homes that would go directly to sale along with the plots. The developers using this model discovered that the combination of plot/house sales were more stable, profitable and even marketable than the individual plot sales. Many land subdividers followed this development model known also as ‘community builders’

(Weiss, 2002:45).

The model became particularly popular and common after the speculative subdivisions’

resale strategy boomed and then collapsed in the late 1920s (Weiss, 2002). Using the speculative model, developers changed the nature of the American land development during the early decades of the twentieth century. For instance, land subdivision development has itself been developing from a basic process, as that in which land is subdivided providing housing plots for sale, to a more complex process, which focuses on providing the complete development of communities (Weiss, 2002; Miles et al., 2007). Authors such as Schultz and Kelley (1985) reinforce the distinction between the basic and complex models by describing the differences between the developer and the builder in America. Schulz and Kelley indicate that the developer acquires raw land, subdivides it, and installs improvements such as streets, kerbs, pavements, sewers, water mains and other amenities. But the builder, on the other hand, ordinarily acquires already subdivided and improved plots and constructs houses on them. In the end, the distinction between each actor has become less important in recent years, and at present most developers perform both functions.

Converting and improvement in the world of subdivision development has led to a shifting of roles and responsibilities for the many stakeholders involved. There are

Chapter Two: Conceptual Framework of Subdivision Control: Impacts on Residential Built Environment

many interests involved in the development process including those of the original land owner, the developer, the prospective buyer, and the city as a whole.

Usually it is the ‘entrepreneur’ or developer who brings together and coordinates the agencies, agents, and capital together, adding value to each of them. Authors see the subdivision development process as a series of transformations (Ambrose, 1986; Eisner et al., 1993; Kone, 2006; Miles et al., 2007). In this process capital is converted into raw materials and labour, bought as commodities in the marketplace. Materials and labour are converted into another saleable commodity (i.e. a building), which is then converted back into capital by selling the commodity in the marketplace. For the process to be profitable, the amount received from plot or house unit sales must be greater than the cost of production.

Healey (1992) similarly defines the development process, stating:

the transformation of physical from bundle of rights, and material and symbolic value of land and buildings from one state to another, through the effort of agents with interests and purpose in acquiring and using resources, operating rules and applying and developing ideas and values (p.36).

Moreover, Batbilg (2010) delineated land development as a process of converting the undeveloped land into developed land; in the process the value of land is affected, and is often increased.

Even the process of designing, planning and producing the land subdivision development has evolved. The process includes a variety of ‘actors’ or decision-makers, each with their own objectives, motivations, resources and constraints that are all connected in various ways (Inam et al., 2002). As Ball (1998) argues, the development process is a function of social relations specific to time and place, involving a variety of key actors (e.g. landowners, investors, financiers, developers, builders, various professionals, politicians and consumers). The above actors are engaged in the process of development because of different interests.

In fact, the land subdivision development process is complex, because it allows a number of agencies, public and private, large and small, to undertake development; and diverse, in that it involves the combination of actors or business and various inputs such as land, labour, materials and/or finance (capital) in order to achieve an output or product (Ratcliffe et al., 2004).

Furthermore, Williamson et al. (2010) argue that the land development process usually

There are different models dealing with comprehensive insights of land development processes including:

(1) sequential or descriptive and event-sequence models; (2) behavioural or decision-making and agency models; (3) production-based and equilibrium models; and (4) provision structure and structure models. Gore and Nicholson (1991) and Healey (1991) have identified the models and arranged them into four groups according to the similarities in their approach to the development process (see Table 2.1). This research investigation does not deal with all land development models; rather it focuses on sequence of stages; at each stage certain events occur.

Event-sequence models are derived from estate management, focus on the management of stages in the development process, and are preoccupied with managing the development process.

Behavioural or decision-making models emphasise the roles of different actors in the process and the importance of the decisions.

The models often retain a sequential format, where events are generally presented as secondary to decisions.

Agency models are derived from behavioural or institutional explanations and are focused on the actors in the development process and their relationships. The model has been developed primarily by academics seeking to describe the development process.

Table 2.1: Land development models and descriptions of the development process

Chapter Two: Conceptual Framework of Subdivision Control: Impacts on Residential Built Environment

Gore and Nicholson Healey

Production-based models portray the development process as a specialised form of productive economic activity, and tend to view it from the perspective of the economy as a whole, in a macroeconomic manner.

Equilibrium models are derived from neo-classical economics, and assume that

development activity is structured by economic signals about effective demand, as reflected in rents, yields, etc.

Structure of provision models contend that different types of development are

characterised by different institutional, financial and legislative frameworks, and as such the search for a generally applicable model of the development process is futile.

Structure models focus on the forces organising relationships of the development process and which drive its dynamics. The models are grounded in urban political economics.

Source: Gore and Nicholson (1991) and Healey (1991) cited in Batbilg (2010:16)

The following section explains the main actors in the land subdivision development process.