Abstract The development of urban land is treated as a sequence of activity shifts resulting from locators' efforts to maximize net revenues by mitigating congestion costs and other externalities. This decentralized process is modelled by solving a series of linear assignment problems that track urban land use through time. Network costs are endogenous, and locators update site bids by combining recent experience with a ceteris paribus point of view. Vacancy is treated as a null activity that can be assigned to any number of sites. Locators that have been outbid by vacancy are displaced from the land use system, but may continue to formulate bids and compete for sites.