Impact of infill development on prices of existing apartments in Finnish urban neighbourhoods

Popularity of infill development is increasing because of the environmental benefits and cost saving potential it provides, which relate to the possibility to use existing infrastructure and services. However, the impact of infill development on value of existing properties has not been studied to a sufficient extent. Therefore, the aim of our study is to analyse whether infill development affects the prices of existing apartments. We carried out statistical analysis based on data from seven case neighbourhoods, and prices of more than 6000 housing transactions from one decade. The results of our analysis do not support the hypothesis of infill development affecting positively existing housing prices, but neither did the study show a significant negative effect. Both amenity effect and negative externalities may provide explanations as to why property values do not change due to infill development.

[1]  Chuti Thamrongsrisook,et al.  The Influence of Rapid Transit Systems on Condominium Prices in Bangkok : A Hedonic price model approach , 2011 .

[2]  T. Clark,et al.  Metropolitan density, energy efficiency and carbon emissions: Multi-attribute tradeoffs and their policy implications , 2013 .

[3]  A. Ciccone,et al.  Agglomeration-Effects in Europe , 1999 .

[4]  Henrik Lönnqvist.  On the Effects of Urban Natural Amenities, Architectural Quality and Accessibility to Workplaces on Housing Prices – an Empidical Study on the Helsinki Metropolitan Area , 2015 .

[5]  Piet Rietveld,et al.  The Impact of Railway Stations on Residential and Commercial Property Value: A Meta-analysis , 2003 .

[6]  H. Wen,et al.  Do educational facilities affect housing price? An empirical study in Hangzhou, China , 2014 .

[7]  Karen M. Gibler,et al.  The effect of new residential construction on housing prices , 2014 .

[8]  John F. McDonald,et al.  Reaction of House Prices to a New Rapid Transit Line: Chicago's Midway Line, 1983–1999 , 2004 .

[9]  L. Tyrväinen.  Monetary valuation of urban forest amenities in Finland. , 1999 .

[10]  Robert B. Noland,et al.  Residential Property Valuations near Transit Stations with Transit-Oriented Development , 2014 .

[11]  A. Hastings,et al.  Homo Economicus in a Big Society: Understanding Middle-class Activism and NIMBYism towards New Housing Developments , 2015 .

[12]  Marius Thériault,et al.  Size and proximity effects of primary schools on surrounding house values , 2001 .

[13]  S. Rosenthal,et al.  Evidence on the nature and sources of agglomeration economies , 2004 .

[14]  W. Alonso.  Location And Land Use , 1964 .

[15]  S. Rosen.  Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition , 1974, Journal of Political Economy.

[16]  Thomas A. Newell,et al.  Development and Neighborhood Revitalization: The Effects of Residential Investment on Property Values in Durham, NC , 2009 .

[17]  Christopher Bitter,et al.  Spatial econometrics, land values and sustainability: Trends in real estate valuation research , 2012 .

[18]  Ming Zhang,et al.  Transit development shaping urbanization: Evidence from the housing market in Beijing , 2014 .

[19]  R A Fejarang.  IMPACT ON PROPERTY VALUES: A STUDY OF THE LOS ANGELES METRO RAIL , 1993 .

[20]  Todd Litman,et al.  Economic Value of Walkability Economic Value of Walkability , 2022 .

[21]  Timur Hulagu,et al.  A Hedonic House Price Index for Turkey , 2016 .

[22]  Agglomeration-Effects in Europe , 2002 .

[23]  J. Ooi,et al.  The spillover effects of infill developments on local housing prices , 2013 .

[24]  A. Krueger.  Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey , 2011 .

[25]  W. M. Jayantha,et al.  The Effects of Urban Redevelopment on Neighbourhood Housing Prices , 2010 .

[26]  B. H. Day,et al.  The theory of hedonic markets: obtaining welfare measures for changes in environmental quality using hedonic market data , 2001 .

[27]  Matthew E. Kahn,et al.  The Greenness of Cities: Carbon Dioxide Emissions and Urban Development , 2008 .

[28]  Mikhail Chester,et al.  Transit-oriented smart growth can reduce life-cycle environmental impacts and household costs in Los Angeles , 2014 .

[29]  J. Cortright,et al.  Walking the Walk How Walkability Raises Home Values in U . S . Cities , 2009 .

[30]  Myung-Jin Jun,et al.  Redistributive effects of bus rapid transit (BRT) on development patterns and property values in Seoul, Korea , 2012 .

[31]  M. Espey.  The Impact of Airport Noise and Proximity on Residential Property Values , 2000 .

[32]  Alain Bertaud.  The Spatial Organization of Cities: Deliberate Outcome or Unforeseen Consequence? , 2004 .

[33]  D. McMillen,et al.  Teardowns and land values in the Chicago metropolitan area , 2007 .

[34]  Raymond Y. C. Tse,et al.  Measuring residential property values in Hong Kong , 2000 .

[35]  A. Perrels,et al.  Housing Prices and the Public Disclosure of Flood Risk: A Difference-in-Differences Analysis in Finland , 2016 .

[36]  R. Muth.  CITIES AND HOUSING; THE SPATIAL PATTERN OF URBAN RESIDENTIAL LAND USE. , 1969 .

[37]  Wei Yu,et al.  Effect of an Open-air, Mixed-use Shopping Center on the Price of Nearby Residential Properties , 2014 .

[38]  Brent D. Ryan,et al.  Valuing New Development in Distressed Urban Neighborhoods , 2007 .

[39]  Michael Brennan,et al.  Are exclusion factors capitalised in housing prices , 2014 .

[40]  N. Nakagoshi,et al.  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 , 2007 .

[41]  J. Kmenta.  Mostly Harmless Econometrics: An Empiricist's Companion , 2010 .

[42]  Nathaniel Baum-Snow.  Suburbanization and transportation in the monocentric model , 2007 .

[43]  John Glen,et al.  THE IMPACT OF A LIGHT RAIL SYSTEM ON THE STRUCTURE OF HOUSE PRICES: A HEDONIC LONGITUDINAL STUDY. , 1996 .

[44]  D. Damigos,et al.  The value of view through the eyes of real estate experts: A Fuzzy Delphi Approach , 2011 .

[45]  S. Machin,et al.  Valuing rail access using transport innovations , 2004 .

[46]  C. V. D. Bosch,et al.  Challenges and strategies for urban green-space planning in cities undergoing densification: A review , 2015 .

[47]  P. Stopher,et al.  The costs of infill versus greenfield development: a review of recent literature , 2006 .

[48]  E. Mills.  An Aggregative Model of Resource Allocation in a Metropolitan Area , 2007 .

[49]  K. Kovacs.  Integrating property value and local recreation models to value ecosystem services from regional parks , 2012 .

[50]  C. Ferrell,et al.  Measuring the impact of sub-urban transit-oriented developments on single-family home values , 2013 .

[51]  Keith Wiley,et al.  Infill Development: Perspectives and Evidence from Economics and Planning , 2011 .

[52]  Hoon Han,et al.  Impact of High Voltage Overhead Transmission Lines on Property Value – An Australian Residential Case Study , 2013 .