The existing models of residential location are facing difficulties in explaining new trends in urban development such as gentrification and abandonment. The mainstream approach which stresses the bid-rent formulations and the access/space trade-off seems to be at variance with the current reality of dispersal of both industry and housing in modern cities. In this paper, it is proposed that the focus on the city centre(s) and distance(s) from it (or them) should be shifted to two other categories of parameter: housing status and dwelling quality. A model of interaction between these parameters can be used not only to describe but also to predict various types of residential development in different urban contexts. The components of a new theory of residential location are proposed.
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