Decision Analysis of Urban Land Intensive Use from the Perspective of Economics

The state of intensive urban land use is a collection of its land parcel use state. Research on the characteristics and mutual influence of decision subjects in land use decision-making is needed to improve land-use decisions and intensive land use. Here, we analyze land-use decision-making, the behavior of land developers by cost-benefit analysis, changes in the inputs from industrial enterprises by long-term production theory and law of land diminishing return, land supply choices of the local government, land supply strategies for residential and industrial areas, and the effects of intensive land use. We found that to improve the intensity of land use, the decision of land developers is to increase the building density and floor area ratio as much as possible in the range of acceptable technical conditions and the market. As for industrial land, the rise in relative land price means that capital and labor for production will increase. However, according to the law of land diminishing returns, increased investments take the total revenue growth as a precondition. The local government tends to supply more land: for residential and commercial land, it will obtain land revenue at a higher premium by virtue of monopoly market conditions but lower the price of industrial land to attract enterprises. In order to promote land intensive use, local government should standardize land development by restricting planning targets and regulating land use, and raise the intensity of industrial land by setting an investment intensity threshold. Local government should also regulate its decision-making behavior by improving related laws and policies.