C1. Property value and green space
The value of a view
Aims and method:
Estimates the value of views in single-family residential real estate markets in Bellingham, Washington, a city with a variety of views, including ocean, lake, and mountain. The method used a dataset of 7,305 transactions of housing over an eleven year period and an hedonic pricing model that allowed for differentiation of views by both type and quality.
Key findings:
· Depending on the particular view, willingness to pay for a good view can be high.
· The highest-quality ocean views are found to increase the market price of an otherwise comparable home by almost 60%; the lowest-quality ocean views still add about 8%.
Reference:
Benson, E. D., Hansen, J. L., Schwartz, Jr, A. L., & Smersh, G. T. (1998). Pricing residential amenities: the value of a view. The Journal of Real Estate Finance and Economics, 16(1), 55-73.
https://link.springer.com/article/10.1023%2FA%3A1007785315925?LI=true
Trees and residential sales prices
Aims and method:
Assesses the impact of green space on property values using a local real estate database. A survey of the sales of 844 single family residential properties in Athens, Georgia (USA) was completed for the research.
Key findings:
· The research indicated that housing in the vicinity of landscaping with trees was associated with 3.5%–4.5% increase in sales prices.
· The average sales price increase due to trees was between $2869 and $3073 (1985 dollars) and was largely due to trees in the intermediate and large size classes, regardless of species.
· This increase in property value results in an estimated increase of $100 000 (1978 dollars) in the city's property tax revenues.
Reference:
Anderson, L. M., & Cordell, H. K. (1988). Influence of trees on residential property values in Athens, Georgia (USA): A survey based on actual sales prices. Landscape and Urban Planning, 15(1-2), 153-164.
http://www.sciencedirect.com/science/article/pii/0169204688900230
City trees and property value
Aims and method:
Evaluates the added value to properties by greening. The research reviews a set of studies that used Hedonic pricing methods to explore the relationship.
Key findings:
· Trees and forest cover in development growth areas (internationally) adds value to development parcels
· Homes with trees are generally preferred to comparable homes without trees, with the trend across studies suggesting a price increase of about 7%.
· The studies reviewed here indicated 2% increase when mature yard trees are greater than 9-inch dbh; 3-5% increase when trees are part of front yard landscaping; 6-9% increase when there is good tree cover in a neighbourhood ;10-15% increase when there are mature trees in a high income neighbourhood
· Market price studies of treed versus un-treed lots show: 18% price increase for building lots with substantial mature tree cover; 22% price increase in tree-covered undeveloped acreage; 19-35% price increase in lots bordering suburban wooded preserves; 37% price increase when development is within open land that is two thirds wooded.
Reference:
Wolf, K. L. (2007). City trees and property values. Arborist News, 16(4), 34-36.
http://www.naturewithin.info/Policy/FMJ_City%20Trees_Property%20Values.pdf
Paying for nature
Aims and method:
Addresses the environmental benefits of less land consumption and a growing interest in addressing the negative economic and social impacts of sprawl by examining price premiums in conservation subdivisions (residential developments with a stronger emphasis on landscape integration) versus conventional subdivisions. The case study is in the town of South Kingstown, Rhode Island (USA)
Key findings:
· Lots in conservation subdivisions carry a premium, are less expensive to build, and sell more quickly than lots in conventional subdivisions.
· Designs that take a holistic view of ecology, aesthetics, and sense of community can assuage concerns about higher density.
Reference:
Mohamed, R. (2006). The economics of conservation subdivisions: Price premiums, improvement costs, and absorption rates. Urban Affairs Review, 41(3), 376-399.
http://journals.sagepub.com/doi/abs/10.1177/1078087405282183
Air pollution, nature and housing value
Aims and method:
Property value data and hedonic pricing models are used to examine consumers' underlying preferences for various amenities and accessibility factors in Salt Lake County (USA), with a particular focus on air pollution and forest coverage. Three forms of regression analysis are used to understand the patterns of spatial heterogeneity in preferences.
Key findings:
· Results from ordinary least squares (OLS) regression show that single-family home values are affected not only by structural attributes, but also by urban amenities and accessibility factors such as air pollution, forest coverage, quality of public schools, and commuting cost.
· After controlling the covariates in spatial lag regression, air pollution and the lack of forest coverage have the most significant and detrimental effect on housing values over time.
· Results from geographically weighted regression indicate that spatial heterogeneity is evident. However, air pollutions and forest cover matter irrespective of the method used.
Reference:
Li, H., Wei, Y. D., Yu, Z., & Tian, G. (2016). Amenity, accessibility and housing values in metropolitan USA: A study of Salt Lake County, Utah. Cities, 59, 113-125.
http://www.sciencedirect.com/science/article/pii/S0264275116302888
Natural open space and house price variation
Aims and method:
Examines the effect on house prices of preserved open spaces. Recent data from one Swedish urban house market is used to estimate a geographically weighted hedonic function.
Key findings:
· Open landscape amenities are important determinants of urban house prices and thereby also of urban quality of life but there is a significant variation in how open space amenities influence house prices.
· These amenities are valued higher in areas where undeveloped land is relatively scarce and where population and home densities are relatively high.
Reference:
Nilsson, P. (2014). Natural amenities in urban space–A geographically weighted regression approach. Landscape and Urban Planning, 121, 45-54.
http://www.sciencedirect.com/science/article/pii/S0169204613001783
The value of open space in residential areas
Aims and method:
Asks if structural green space adds value sufficient to offset the cost of land devoted to it. Based on a case study of a Radburn style development in Dallas, the research uses sales and interview data to explore the relationship.
Key findings:
· The greenways were used for aesthetic purposes and function as spaces for exercise and play
· Homeowners value the open space - both those who live directly on the internal greenways and those who do not.
· However, where the open space causes a reduction in private backyard space, homeowners do not appear to value public open space as highly as private space
Reference:
Peiser, R. B., & Schwann, G. M. (1993). The private value of public open space within subdivisions. Journal of Architectural and Planning Research, 10(2): 91-104.
http://www.jstor.org/stable/43028735?seq=1#page_scan_tab_contents
Greenbelt proximity and residential value
Aims and method:
Examines the economic value of being close to greenbelt in Colorado (USA). Utilises an ordinary least squares (OLS) procedure to estimate the relationship between greenbelt proximity and property values for an aggregate sample of 85 observations.
Key findings:
· The average value of properties adjacent to the greenbelt was 32% higher than those 3,200 walking feet away
Reference:
Correll, M. R., Lillydahl, J. H., & Singell, L. D. (1978). The effects of greenbelts on residential property values: some findings on the political economy of open space. Land economics, 54(2), 207-217.
http://www.jstor.org/stable/3146234?seq=1#page_scan_tab_contents
The value of parks
Aims and method:
Reviews the economic, environmental and social value of green spaces in cities. The report focuses on eight case studies and evaluates the benefits of the green spaces through eight case studies and a combination of qualitative interviews and a property valuation exercise.
Key findings:
· There is a positive relationship in value associated with residential properties overlooking or being close to a high quality park. These premiums associated with the park do vary according to the type of park, the layout of property, the nature of the location and to some extent the nature of the local population and the type of property involved.
· Houses close to parks average 8% higher prices than similar properties further away
· Relatively higher values can be seen where properties face onto a road that overlooks the park rather than backing on to it.
Reference:
CABE Space (2005). Does money grow on trees?. Commission for Architecture and the Built Environment
Open space and residential property value
Aims and method:
Estimates the effects of proximity to open space on residential sales prices. Uses hedonic analysis of home transaction data from the Minneapolis–St. Paul metropolitan area (USA) whilst allowing the effects of proximity to vary with demographic and location-specific characteristics.
Key findings:
· The value of proximity to open space is higher in neighbourhoods that are dense, near the central business district, high-income, high-crime, or home to many children.
· In neighbourhoods that are twice as dense as average, the amenity value of proximity to neighbourhood parks is nearly three times higher than average
· The value of an average home increases with proximity to neighbourhood parks, special parks, lakes, and rivers, with benefits ranging from a low of 0.0035% of sales price for every 1% decrease in the distance to the nearest neighbourhood park, to a high of 0.0342% for every 1% decrease in the distance to the nearest lake. These effects are statistically significant at or near the 1% level.
Reference:
Anderson, S. T., & West, S. E. (2006). Open space, residential property values, and spatial context. Regional Science and Urban Economics, 36(6), 773-789.
Open space types and housing value
Aims and method:
Explores the relationship between a home's sale price and its proximity to different open spaces types using a data set comprised of single-family home sales in the city of Portland, within Multnomah County, between 1990 and 1992. Hedonic pricing is used to examine a dataset of some 16,636 single-family home sales.
Key findings:
· The type and size of open spaces matter and not just their proximity.
· All open space types are estimated to have a positive statistically significant effect for homes that are adjacent (within 200 feet) of the open space.
· Natural area parks are estimated, on average, to have the largest statistically significant effect on a home’s sale price.
· Golf courses, specialty parks/facilities, and urban parks are also found to have a positive statistically significant effect on a home’s sale price.
Reference:
Lutzenhiser, M. & Netusil, N. (2001) The effect of open spaces on a home’s sale price, Contemporary Economic Policy, 19(3): 291-298
http://onlinelibrary.wiley.com/doi/10.1093/cep/19.3.291/abstract
The amenity value of open green space
Aims and method:
Examines the relationship between the availability of urban green space and property values in Jinan City, China. Uses GIS and landscape metrics in determining hedonic price model variables which were then tested in a hedonic price model.
Key findings:
· Confirmed the positive amenity impact of proximate urban green spaces on house prices.
· Accessibility to parks and plazas demonstrated significance at the 5% level.
· Properties with a higher percentage of green space area within a 300 m radius have higher house values, with each percentage point of green space adding about 2.1% to the price per square metre
Reference:
Kong, F., Yin, H. & Nakagoshi, N. (2007) Using GIS and landscape metrics in the hedonic price modeling of the amenity value of urban green space: A case study in Jinan City, China, Landscape and Urban Planning, 79(3-4): 240-252
http://www.sciencedirect.com/science/article/pii/S0169204606000466
Public green space and property value
Aims and method:
Surveyed the relationship between the average house prices of 76 residential areas and 14 parks in Beijing, and measured the total benefits of 18,070 ha public green spaces on residential property value. The research uses inventory data of urban green spaces (2009) and GIS techniques combined with a hedonic pricing model.
Key findings:
· Residential property values located 850-1604 meters away from parks achieved a 0.5% to 14.1% increase in sales price.
· The overall benefit of Beijing’s public green spaces on residential property was 2.86 billion CNY (1 USD=6.83 CNY), and the average benefit of per hectare public green space was 0.16 million CNY, corresponding to 1.8-3.9 times of the maintenance cost of green space in Beijing.
Reference:
Zhang, B., Xie, G., Xia, B. & Zhang C. (2012) The Effects of Public Green Spaces on Residential Property Value in Beijing, Journal of Resources and Ecology, 3(3): 243-252
Open space, water bodies and housing value
Aims and method:
Estimates the influence of proximity to water bodies and park amenities on residential housing values in Knox County, Tennessee, using the hedonic price approach. Values for proximity to water bodies and parks are first estimated globally with a standard ordinary least squares (OLS) model. A locally weighted regression model is then employed to investigate spatial nonstationarity and generate local estimates for individual sources of each amenity
Key findings:
· Natural and constructed amenities are valuable attributes in housing demand and positively impacts sale prices, but the extent of that impact varies considerably
· The marginal implicit price of proximity to water bodies (1,000 feet closer) was estimated to be $491 in the global model, but ranged from -$497 to $6,032 locally for individual water bodies.
· The marginal implicit price of proximity to local parks (1,000 feet closer) was estimated to be $172 in the global model, but ranged from -$662 to $840 locally at an individual park level.
Reference:
Cho, S-H, Bowker, J. & Park, W. (2006) Measuring the contribution of water and green space amenities to housing values: an application of spatially weighted hedonic models, Journal of Agricultural and Resource Economics, 31(3): 485-507
Green space availability and residential value
Aims and method:
Using a hedonic pricing specification, this paper measures the proximate effect of public green space on residential property value. It examines the relationship between 3,854 residential sales transactions and public green spaces across the Belfast (UK) housing market gathered from Land and Property Services throughout the year 2011 showing the percentage effect on property value with respect to distance to public green space
Key findings:
· Urban green space has a significant positive impact on proximate residential properties sale price for the terrace and apartment sectors
· Terrace and apartment property located closer to public green spaces achieved increases in sale price of up to 49 per cent.
· There were limited statistically significant proximate effects evident for the detached and semi-detached sectors, suggesting that those who already have their own green space (gardens) value public green space less
Reference:
McCord, J., McCord, M., McCluskey, W., Davis, P., Mcllhatton, D., & Haran, M. (2014) Effect of public green space on residential property values in Belfast metropolitan area, Journal of Financial Management of Property and Construction, 19(2): 117-137
http://www.emeraldinsight.com/doi/pdfplus/10.1108/JFMPC-04-2013-0008
Economic benefits of natural green space protection
Aims and method:
Explores the effect of natural open space preservation on property values. The report uses a systematic review of the literature with a particular focus on Canadian studies.
Key findings:
· Open space has a positive effect on real estate values, with some studies showing a 15% uplift.
· Homebuyers are willing to pay a premium for properties near natural open space, and residents will pay to permanently protect a natural open space in their neighbourhood.
· Many developers are increasing the marketability of projects by integrating ecological considerations whilst municipalities are increasing local property tax take through the higher valuations given to properties near green space.
Reference:
Curran, D. (2001). Economic benefits of natural green space protection.
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.605.4950&rep=rep1&type=pdf
Valuing greenness
Aims and method:
Provides an update of a 2003 study Valuing Greenness: Green spaces, house prices and Londoners’ priorities. This research builds on the original study with better green space data and a wider range of built environment and locational factors analysed at a more detailed
Key findings:
· The most important factors influencing house prices relate to physical built environment housing qualities, particularly house size and age, with larger older housing being much more desirable.
· Access to parks is correlated with built environment factors, such as housing type and size, and is negatively correlated with deprivation. The inclusion of socio-economic and built environment variables in the model reduces the strength of the correlations between green space and average house prices.
· Each hectare of park space within 1km of housing increases house prices by 0.08%.
· The presence of a regional or metropolitan park within 600 metres was found to add between 1.9% and 2.9% to total house value.
Reference:
Smith, D. (2010). Valuing housing and green spaces: Understanding local amenities, the built environment and house prices in London.
https://www.london.gov.uk/sites/default/files/gla_migrate_files_destination/GLAE-wp-42.pdf
Valuing absence (of development)
Aims and method:
Explores the marginal values of different open space attributes in residential areas. Utilises a hedonic pricing model with residential sales data from central Maryland (USA).
Key findings:
· Surrounding open space significantly influences the residential sales price of houses but different types of open space have different effects.
· There is a premium associated with permanently preserved open space relative to developable agricultural and forested lands, supporting the hypothesis that open space is valued primarily for providing an absence of development, rather than for providing any particular open space amenities.
Reference:
Irwin, E. G. (2002). The effects of open space on residential property values. Land economics, 78(4), 465-480.
Valuing open space continuity
Aims and method:
Analyses the structuring of open space in Flanders (Belgium), and seeks to understand how the size of open space units and its spatial fragmentation affects their perceived value. Uses a quantitative and geospatial approach at the macro scale and a qualitative approach at the micro or local level. It focuses on Woluweveld, a Flemish site located close to Brussels.
Key findings:
· Larger and contiguous open spaces in the rural area tend to be valued higher than smaller open spaces in urban fringe areas.
· When open space is judged according to criteria expressed by stakeholders and communities in the urban fringe, however, small spatial units are estimated as being particularly valuable leading to a ‘fragmentation bias’.
Reference:
Dewaelheyns, V., Vanempten, E., Bomans, K., Verhoeve, A., & Gulinck, H. (2014). The Fragmentation Bias in Valuing and Qualifying Open Space. Journal of Urban Design, 19(4), 436-455.
http://www.tandfonline.com/doi/abs/10.1080/13574809.2014.923741?journalCode=cjud20
Value of open space in urban locations
Aims and method:
Examines the research on valuing open space. Provides a systematic review of more than 60 published articles that have attempted to estimate the value of different types of open space using revealed and stated preference techniques.
Key findings:
· Both contingent valuation and hedonic studies generally show that there is value to preserving parks, greenways, forests, and other natural areas in urban locations.
· However, the values vary widely with the size of the area, the proximity of the open space to residences, and the type of open space, and some busy urban parks can even have negative effects on property values for nearby households;
· All kinds of open space provide more value in urban areas than in suburban ones.
Reference:
McConnell, V., & Walls, M. A. (2005). The value of open space: Evidence from studies of nonmarket benefits (pp. 1-78). Washington, DC: Resources for the Future.
http://www.rff.org/files/sharepoint/WorkImages/Download/RFF-REPORT-Open%20Spaces.pdf
Private versus public open space
Aims and method:
Explores the value of open spaces and whether households would be willing to trade off the size of their own lot for open space in the subdivision. The study includes 3,386 individual house sales within eighty-nine, subdivisions.
Key findings:
· A 10% increase in private lot size is associated with an approximately 0.6% increase in house price.
· Increasing open space acreage from 20 to 30 acres would increase sales price by 0.5%.
· Adjacency to subdivision open space has a positive effect on house price and there is some small willingness to trade off lot size for more subdivision open space.
Reference:
Kopits, E., McConnell, V., & Walls, M. (2007). The trade-off between private lots and public open space in subdivisions at the urban-rural fringe. American Journal of Agricultural Economics, 89(5), 1191-1197.
https://www.jstor.org/stable/30139460?seq=1#page_scan_tab_contents