Population aging and population decline, coupled with a saturation of the Japanese economy and declining revenue for infrastructure maintenance, pose particular problems in outer suburban areas. A new planning philosophy based on planned-retreat and planned re-concentration is described. To evaluate and identify those areas suitable to apply this planning system a decision support system is being constructed. This paper introduces the theory underpinning this research and development into the social value of residential locations. It explains the optimization model structure based on the quality adjusted life years concept and its associated components of accessibility to land uses, residential amenity and risk of hazardous factors such as earthquakes, floods and road traffic noise and emissions (livability). Economic, equity and global environmental constraints are factored into the model. An approximate model for practical applications is formulated and its data requirements relevant to the urban planning process are outlined.