The rent gap refers to the difference between the capitalized rent realized from a plot of land and the potential rent possible if it were developed to its “highest and best” use. Introduced by Neil Smith in 1979, the rent gap provides a systematic production-side theory of urban rent and inner-city transformation. The concept, however, has been critiqued for dismissing the role of individual agents and consumption preferences in explanatory accounts of gentrification.
Addie, Jean-Paul, "Rent Gap" (2014). Urban Studies Institute. 5.