In particular, the author describes inefficient land allocation as a market failure because the market results in a quantity of land to be used for urban development that is

This came from Microeconomics 4th Edition where it cited Jun Jie Wu an economist made his observations and published it in an agricultural magazine known as Choices. He described market failure and inefficient land allocation as both economic terms in an urban development that did not meet expected growth creating an unbalance situation between the consumers and producers.

Market failure is a used term to describe that the producer was not able to produce the right products or the customers aren't able to buy enough products that would make the business profitable or good for both. Inefficient land allocation can add up to reasons of having market failures when it makes the business release more expenses than profit.

Externalities or spillover occurs when some of the benefits or the costs of production are not fully reflected in market demand or supply schedules.

Ihope this answers your question