What demographic factor impacts land values in city centers?

The correct choice highlights the influence of growing numbers of smaller households on land values in city centers. As urban areas become more desirable for living and working, the demand for housing increases. Smaller households, such as singles or couples without children, typically seek housing in city centers for their proximity to jobs, amenities, and social opportunities.

The presence of smaller households can lead to a higher demand for housing units that cater specifically to their needs, such as apartments or compact living spaces. This increased demand, coupled with limited supply, drives up land values as developers seek to capitalize on the lucrative market for residential and commercial properties that appeal to these demographic groups.

Indicators such as population density can play a role in land values, but it is the specific needs and preferences of smaller households that more directly translate into increased demand and subsequently higher land values in urban settings. Additionally, transformative urban policies and cultural shifts towards smaller living arrangements further reinforce this trend.