Location choice of residential housing supply: An application of the multiple discrete-continuous extreme value (MDCEV) model

Abstract

The supply location of residential housing is the result of multiple, simultaneous decisions by housing developers. This choice situation can be characterized by the discretionary choice of locations for the housing projects and the amount of housing units to be built at the given locations. Within this context, the modelling of residential housing supply locations, or the allocation of predicted housing supply over space, is a discrete-continuous process. In this paper, we apply a multiple discrete continuous extreme value (MDCEV) model to simultaneously model the location choice and amount of housing supply. The empirical study is conducted in the city of Toronto with a pooled model, and four separated models for each structure type. The prediction results indicate reasonable fits. The developed model can be used to generate housing supply at a given period over space in an urban microsimulation system and serves as a valuable tool for policymakers, urban planners, and researchers in the field of housing supply and urban systems.