Development Proposal Choice Model (DPCM)

Objective

The Development Proposal Choice Model predicts the selection of proposed development projects to be constructed on parcels.

Algorithm

The model uses a new approach to reconcile the problem that developers face in choosing locations that are profitable for their development projects, and the problem the landowner faces in choosing whether to develop their property, and if so, into which of the allowed uses? This model can be seen as a choice being made by a financial agent, determining whether to approve construction financing to possible projects.

The model begins by evaluating each parcel, based on its remaining vacant land, and the plan type that is on the parcel. It then makes an assessment for each of the development_templates as to whether that template would be permitted by land use regulations, and would fit on the parcel. Any of the templates that pass both of these tests are then configured as development proposals. Once all parcels have been evaluated and a full list of proposals has been generated, the model uses the Expected Sales Price Model to predict the market value for the proposal. The development costs for constructing the proposal is also calculated, and a resulting Return on Investment (ROI) is computed. The model treats the ROI as the profit (the counterpart of utility for firms), and samples projects based on a Multinomial Logit formulation.

Configuration

The configuration of the model is summarized in the following table:

Element	Setting
Model Type	Customized
Submodels	Generic Land Use
Inputs	Plan types, development templates, land area, expected sales price, development costs
Outputs	Predicted development projects to be constructed by the building construction model

Data

These tables are used by the Development Project Proposal Sampling Model in the parcel-based version of UrbanSim.

Table Name	Brief Description
building_sqft_per_job	Non-residential sqft used by each job
development_constraints	Density constraints imposed by land use regulations
demolition_cost_per_square_feet	Demolition cost per sqft for redevelopment
development_project_proposals	Development proposals (generated by the model)
development_templates	Development templates describe types of possible projects by land use and density
development_template_components	Components allow templates to contain mixtures of uses
target_vacancies	Structural or target vacancies - trigger development when vacancies fall below this
velocity_functions	Functions providing timetables for different kinds of developments

-- PaulWaddell - 09 Dec 2009