Neighborhood amenities: An economic analysis

A spatial model of household and firm demand and supply of market goods is developed. Housing and neighborhood amenity markets are explicitly considered in deriving market equilibrium. The equilibrium relationships are empirically investigated, yielding important insights into the functioning of the urban economy. Attention is focused on externalities involved in neighborhood markets and the simultaneous determination of housing and amenity market equilibrium. The effect of neighborhood amenities on household equilibrium is of a major magnitude and effects of “externality” variables on both housing and amenity equilibrium are substantiated. The degree of neighborhood homogeneity and the extent of government programs aimed at neighborhood development are found to have significant impacts on housing and amenity markets.     

Segregation and Tiebout sorting: The link between place-based investments and neighborhood tipping

Segregation has been a recurring social concern throughout human history. While much progress has been made to our understanding of the mechanisms driving segregation, work to date has ignored the role played by location-specific amenities. Nonetheless, policy remedies for reducing group inequity often involve place-based investments in minority communities. In this paper, we introduce an exogenous location-specific public good into a model of group segregation. We characterize the equilibria of the model and derive the comparative statics of improvements to the local public goods. We show that the dynamics of neighborhood tipping depend on the levels of public goods. We also show that investments in low-public good communities can actually increase segregation.     

Jobs versus amenities in the analysis of metropolitan migration

"This paper demonstrates that jobs and wages are considerably more important than location-specific amenities in explaining net metropolitan migration of employed persons [in the United States]. These results, which are derived mainly from a unique set of annual migration data, differ considerably from the earlier findings of P. E. Graves...that show amenities to be powerful contributors to the analysis of net metropolitan migration. Several hypotheses are offered and tested to explain the appreciable difference between Grave's results and those of the present study, but the importance of economic factors as opposed to amenities persists."     

SPATIALLY-VARYING EFFECTS OF REZONING ON HOUSING PRICE

A hedonic price equation is estimated at the parcel level to capture the spatially-varying effects of rezoning on housing prices using a geographically weighted regression - spatial autoregressive error model (GWR-SEM). The empirical results highlight a number of points. Firstly, the positive amenities from rezoning to office use act as a buffer and transition the zones between single family housing to commercial zones near downtown areas may be applicable to approving the same kind of rezoning in other areas. Secondly, when approving rezoning from agriculture to residential or commercial use, it may be necessary to anticipate the positive amenities from rezoning in less well-off neighborhoods and the negative amenities from rezoning in well-off neighborhoods. Thirdly, the positive amenities from well-designed open space preservation districts may encourage county planners to consider similar types of projects in the future.     

What is a strategic acquisition? Decision modeling in support of foreclosed housing redevelopment

This paper describes and develops a model for calculating location-based strategic values of foreclosed properties considered for acquisition and redevelopment by community development corporations (CDCs). A property’s strategic value refers to its proximity to site-specific neighborhood amenities and disamenities (e.g. schools, public transit, distressed properties), given the relative importance of that proximity to CDC organizational and community objectives. We operationalize the concept of strategic value, and apply this concept to a salient public sector decision problem. Using data and value assessments from a CDC engaged in foreclosed housing redevelopment, we compute measures of strategic value for a set of acquisition candidates. We show that strategic values can differ in systematic ways depending on the types of amenities and disamenities identified as relevant for CDC acquisition decisions, the relative importance assigned to those amenities and disamenities, and the utility maximization objectives of the CDC. We conclude by proposing a multi-criteria decision model for foreclosed housing acquisition and redevelopment which incorporates a theory of residential housing impacts for which strategic value measures are a special case.     

Implications of alternate policies on welfare of slum dwellers: Evidence from Pune,India

In this paper we examine how slum dwellers value location-based amenities. In most developing country cities, residents living in slums have poor-quality dwellings and limited access to basic public services and amenities. Using data from Pune, India, we estimate the residential location choices of slum dwellers, which are conditional on housing quality, neighborhood amenities, and community structure. We use these estimates to simulate the impact of alternate interventions on household welfare. We find that households derive benefits from housing quality and neighborhood amenities. While relocating households to the periphery has adverse consequences for household welfare, we show that households could be adequately compensated out of the increased tax revenue accruing from alternative uses of the vacated central land.     

Crime and Racial Composition in Contiguous Communities as Negative Externalities: Prejudiced Household's Evaluation of Crime Rate and Segregation Nearby Reduces Housing Values and Tax Revenues

Abstract . How the level of amenities in surrounding communities affects the residential location decisions of households is considered. The amenities specifically taken into account are the crime and racial composition of the household's community and the contiguous communities. The theory of the household's valuation of neighborhood amenities through a housing value equation is expanded to include how the household's valuation of amenities is affected by the amenities in surrounding areas. An empirical model using data for 71 suburban communities in the Chicago Standard Metropolitan Statistical Area is specified to measure the simultaneous interaction between housing values, crime, and police effort. A revenue equation is included to determine how the household's valuation of crime and racial composition could affect the community's revenue-raising ability. The empirical results indicate that the crime and racial composition of surrounding communities as well as within the household's community have a statistically significant negative effect on housing values. While the magnitude of the effect is small, the empirical results suggest that households consider the crime rate and racial composition of surrounding communities as negative externalities.     

A microeconometric analysis of housing and life satisfaction among the Vietnamese elderly

This study examines the relationship between housing and subjective well-being among the Vietnamese elderly, using data from the 2011 Vietnam Ageing Survey. Our regression analysis reveals that permanent housing and better amenities are major factors contributing to housing satisfaction and life satisfaction. Notably, we find that housing satisfaction has a strongly positive impact on life satisfaction and the impact is stronger after controlling for endogeneity problems. Thus, the finding confirms that housing is an important life domain and as a result, housing satisfaction is a strong predictor of life-satisfaction judgments. The findings might suggest that people made a rational choice when they invested a large amount of resources in their houses with notable well-being gains. Also, another implication here is that policies and programs to assist poor families in moving out of temporary accommodation or improving housing amenities are likely to be beneficial in improving well-being for the poor elderly.

     

Small Cities Matter, Too: The Impacts of an Airport and Local Infrastructure on Housing Prices in a Small Urban City

Cities with small populations tend not to receive as much attention in housing hedonic studies as do large metropolitan areas despite their similar economic development goals (quality of life improvements for their citizens, etc.). However, small cities, with their relatively smaller number of amenities and features, tend to have fewer numbers of variables that operate to determine house prices. Therefore, hedonic prices can be estimated adequately for a single neighborhood in a small city with publicly available data, particularly for local officials who do not have the time or financial resources to complete detailed studies of their cities. In this study, a general model is estimated that uncovers the impacts of airport-related noise, local recreational amenities, public transportation services, and schools on housing prices in a small city in metropolitan Atlanta, Georgia, USA. The implications and usefulness of this approach to local economic developers and city planners will be discussed.     

住房与交通综合可支付性指数的设计与应用——以北京为例

城市空间结构的理论及实证研究表明,城市土地利用与交通系统之间存在着密切的互动关系.在空间上,居民所负担的住房成本和交通成本通常呈现此消彼长的关系.因此,单纯考虑"住房成本占收入的比重"不能全面衡量居住区位选择所引致的成本.为了更全面和精细地评价居民对于住房成本和交通成本的综合支付能力及其空间分布特征,设计了住房与交通综...     

Determinants of local housing growth in a multi-jurisdictional region,along with a test for nonmarket zoning

In the State of New Jersey, two rural preservation tools are paramount: (1) Zoning that sets a floor on the size of residential lots; and (2) the outright acquisition of open space or its development rights by government and nonprofit entities. The present study explores the effects of these two policies on the number of building permits issued across 83 municipalities in northern New Jersey. The empirical work is based on a widely-used urban development model that uses both monocentric and polycentric factors to allocate growth across a set of suburban communities. The study also develops a growth-based test for binding minimum-lot-size zoning, leveraging the fact that the 83 communities are in a single housing market and must serve the distribution of home and lot-size demand collectively, not individually. The study finds strong evidence of excess large-lot zoning, leading to the suppression of short-term housing growth in communities that specialize in this particular “product.” No firm evidence is found that residential development is attracted to the amenities that flow from either large-lot zoning or open space set asides.     

异质性对新建商品住房市场交易速度的影响——来自北京市的微观证据

基于异方差修正的久期似然模型,利用北京市新建商品住房市场大样本数据,实证检验了城市住房异质性特征对住房市场交易风险率的影响效果及其稳健性。实证结果表明,地铁及通勤设施、教育资源、医疗资源和休闲购物等因素对新建商品住房交易速度的影响逐次减弱,且上述影响在大户型住房、预售住房以及小规模项目住房中更加显著。结论可以为市场参与者调整住房交易决策提供依据,也可以为政府制定住房市场和保障性住房相关政策提供参考。     

Urban size (dis)amenities revisited

An article by Kelley in this Journal has argued that most studies of urban-size amenities built around the analysis of wage differentials have ignored the interaction of supply and demand forces. The result, it was argued, has been serious simultaneous equation bias which suggested that larger cities had lower-valued non-pecuniary amenities. If the bias is eliminated, the opposite is shown to be correct: urban amenities increase in value with city size. This note argues that Kelley's conclusions are themselves based on serious theoretical and econometric errors: (i) He ignores the equilibrium conditions of the model. (ii) He treats variables as exogenous which are not. (iii) He ignores almost perfect collinearity between the variables he uses.     

Market Values of Environmental Amenities: A Latent Variable Approach

This study presents a latent variable framework to provide consistent and efficient estimates of market values of amenities. A model for property values of residential housing using different indicators for neighborhood quality and property value is estimated using data from the U.S. American Housing Survey. The estimated effect of neighborhood quality on property values is positive and more significant compared to the estimates obtained by ordinary least squares and instrumental variable methods. Variances of errors of measurement and variances of the latent structures are shown to be positive and significant without imposing nonnegativity restrictions.     

Heterogeneous expectations,boom-bust housing cycles,and supply conditions: A nonlinear economic dynamics approach

We combine a standard stock-flow housing market model, incorporating explicit relationships between house prices, the housing stock, and the rent level, with a parsimonious expectation formation scheme of housing market investors, reflecting an evolving mix of extrapolative and regressive expectation rules. The model results in a two-dimensional discrete-time nonlinear dynamical system. Based on realistic parameters, the model is able to generate endogenous boom-bust housing market dynamics with lasting periods of overvaluation and overbuilding. We thus exploit our model to investigate how real forces, in particular supply conditions, interact with expectations-driven housing market fluctuations.     

An ordered probit model for estimating racial discrimination through fair housing audits

An ordered probit model is used to measure racial discrimination in the rental housing market for the Detroit metropolitan area during the 1980s. Racial differences persist in (1) rental units suggested to the homeseekers, (2) units actually inspected by them, (3) rental terms and conditions quoted, (4) information on the neighborhood amenities, and (5) qualifications of the homeseekers, but they appear to be declining over time. Agent prejudices and racial composition of neighborhoods in which rental units are located are significant in explaining discrimination.     

我国新建住宅长期供给价格弹性估算——基于35个大中城市的实证研究

大多数住宅模型和政策分析,都直接或间接依赖于住宅供给价格弹性的估计值：为了应对市场需求冲击,是多供给住房还是提高住宅价格？基于Mayo（1981）构建的模型,估算了我国35个主要大中型城市的新建住宅供给价格弹性。根据流量模型,2000-2007年我国的新建住宅价格弹性系数在4-11之间,2008到2013年的价格弹性在5-13之间。而存量调整模型得到了截然不同的估算结果：2008-2013年我国的新建住宅供给价格弹性在1-6之间,更精确的估算出了我国新建住宅供给市场的价格弹性。     

The national internal labor market encounters the local labor market: Effects on employee retention

Formal salary systems are commonplace among medium to large-sized firms and within the United States government. However, there is little evidence regarding the costs, if any, of such systems. This study analyzes the effects on retention within the United States Air Force from an inflexible wage system failing to adequately compensate personnel for local compensating wage differentials. Using location-specific Air Force personnel records, I compare the differences between military and civilian wages, by occupation, across locations to determine if local labor markets play a significant role in the stay or leave decisions for personnel. Results show that rigid wage constraints do in fact impose costs on the firm through increased turnover in locations that fail to adequately adjust wages for the cost of living and amenities.     

Measuring the costs of height restrictions with a general equilibrium model

This paper investigates the costs of residential height restrictions, using a numerically solvable general equilibrium model which is based on residential location theory and which has several novel features. The time and money costs of travel are treated separately, households demand recreational land as well as structure and, most importantly, actual construction cost data are used in an activity analysis formulation of the supply side of the housing market. There are two major conclusions. First, households' demand for recreational land is significant; ignoring it results in simulated cities considerably smaller and denser than is observed. Secondly, residential height restrictions merit serious consideration since their costs appear to be quite modest.     

Buyer information and the hedonic: The impact of a seller disclosure on the implicit price for airport noise

Revealed preference methods like the hedonic model generally assume economic agents have access to publicly available information and use it effectively. In the housing market, the recent proliferation of seller disclosure laws suggests that policymakers perceive buyers to be less than “fully informed,” presumably since they face higher information acquisition costs than sellers. The introduction of an airport noise disclosure in the residential housing market surrounding the Raleigh–Durham International Airport is used as a quasi-random experiment to analyze the impact of this type of information asymmetry between buyers and sellers on housing prices. The results from a regression analysis that controls for potential spatial and temporal confounders, suggest that the airport noise disclosure reduced the value of houses most heavily impacted by airport noise by 2.9 percent. This represents approximately a 37 percentage point increase in the implicit price of airport noise. The results provide evidence that publicly available information, such as that available for airport noise, may not be adequately considered by all buyers. They also suggest that the information environment should be carefully considered when using housing data and the hedonic model to value urban amenities and disamenities.