Land Rent and Land Use
According to the land rent theory, land use is the outcome of the rent-paying ability of different economic functions in urban areas, such as retailing, industry and residence. The optimal location, where accessibility is optimal, is usually the central business district. Every activities, including rural, would like to be located there, but they do not have the same capacity to afford this optimal location.
By overlapping the bid rent curves of all the urban economic activities a concentric land use pattern is created with retailing in the CBD, industry/commercial on the next ring, apartments farther on and then single houses. This representation considers an isotropic space. In the real world a set of physiographic (waterfront, hills, etc.), historical (tourism) and social (race, crime, perception) attributes will influence bid rent curves.
When a city grows, more remote locations are being used, making the rent of most accessible places increase, inducing higher densities and productivity. This generally occurs by "expulsing" some activities outside and by attracting more productive activities. Density and rent are closely related. The above representation considers a monocentric city, but can be modified to apply to a polycentric city.