The urban model is a component of the TELMoS land-use model. It deals with the location of households and jobs by zone within each area, the matching of the supply and demand of labour and with the processes of development which provide the spaces in which households and jobs can be accommodated. The location of households at this level is strongly influenced by the availability of housing, new and secondhand; likewise the location of jobs is strongly influenced by the availability of appropriate types of commercial floorspace. New floorspace supply is in turn restricted by planning policies.

The locations of households and jobs within the stock of buildings are influenced to some extent by the accessibility of each zone. Different measures of accessibility are calculated using the generalised costs output from the transport model. These measures act as influences on different activities: for example, households are influenced by accessibility to workplaces and services, whilst businesses are influenced by accessibility for potential workers and customers. This is the key linkage through which transport affects the local pattern of location and through which different transport schemes produce different forecasts. Note that many of these effects can involve different uses of a given stock of buildings, e.g. an increase in employment may involve an increase in the ratio of workers to floorspace within a zone rather than the provision of additional floorspace. Given these and various other influences, the urban model calculates the location or relocation of households and jobs, which are critical inputs to the transport model.

The urban model also reconciles the supply and demand of labour as population and production change, resulting in changes to the employment status of different households. The model takes account of different household budgets and uses these to calculate the consumer demand for goods and services in each area, as an input to the economic model. This is a key stage in modelling any multiplier effects.

The urban model also estimates the rent values arising from the competition for different kinds of property in each zone. The resulting costs are passed both to the economic model and to the migration model. The urban model also passes information on job opportunities to the migration model.