Urban genotype, phenotype, and spatial rents: novel perspectives on the influence of economic processes and environmental impacts

Abstract

Infrastructure development processes play a dominant role in environmental impacts through the material accumulation, operation and maintenance. A significant portion of these processes is linked to spatial phenomena, such as urbanization and suburbanization, transportation, and commerce. The spatial nature of factors influencing infrastructure development is therefore particularly important, with the role of economic rents increasingly coming to the fore as a previously under-researched area in regional, economic, and sustainability studies.

In this study, I present the potential inherent in a spatially interpreted analysis of the formation of economic rents. In addition to a brief overview of the theoretical history of economic rents and rent-seeking, as well as their spatial and sustainability implications, my study outlines a theoretical framework capable of simultaneously addressing rent-seeking, market economy dynamics, and other spatial environmental and social processes at various levels of analysis. This theoretical framework builds on ecosystem analogies, systemizing the metabolic profile of human settlements and its genetic foundations, namely, the urban genotype and phenotype. The model is also compatible with economic modelling principles.

Using the brief housing market example presented in the study, I demonstrate that economic rents provide a significant financial incentive for developments that lead to major changes in a city’s environmental impacts. The calculation based on the example supports the arguments by revealing that nearly half of the revenues in a real estate investment potentially belongs to the spatial economic rents. The environmental impact resulted in by the model development is nearly equivalent to contemporary average per capita consumption of natural resources in Hungary, but it manifests as an additional demand. Therefore, spatial rents and rents-seeking related to them has been proven to constitute a major driver for excess natural resource use.