The existing models of residential location are facing dif® culties in explaining new
trends in urban development such as gentri® cation 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.