The Impact of Mix Land Use on Residential Property Values

Tinbergen Institute Discussion Paper 10-105/3

33 Pages Posted: 22 Oct 2010

See all articles by Hans Koster

Hans Koster

VU University Amsterdam - Department of Spatial Economics

Jan Rouwendal

VU University Amsterdam - Department of Spatial Economics; Tinbergen Institute

Date Written: October 15, 2010

Abstract

Contemporary European urban planning policies aim to mix land uses in compact neighbourhoods. It is presumed that mixing land uses yields socio-economic benefits and therefore has a positive effect on housing values. In this paper, we investigate the impact of mixed land use on housing values using semiparametric estimation techniques. We demonstrate that a diverse neighbourhood is positively valued by households. There are various land use types which positively affect house prices, e.g. business services and leisure. Land uses that are incompatible with residential land use are, among others, manufacturing and wholesale. It appears that households are willing to pay up to 6 percent more for a house in a mixed neighbourhood than for an otherwise comparable house in a monofunctional area. We also show that there is substantial heterogeneity in willingness to pay for mixed land use. For example, apartment occupiers are willing to pay almost 25 percent more for diversity than households living in detached housing.

Keywords: Mixed land use, diversity, hedonic price analysis, semiparametric estimation

JEL Classification: R14, R30, R52, R58

Suggested Citation

Koster, Hans and Rouwendal, Jan, The Impact of Mix Land Use on Residential Property Values (October 15, 2010). Tinbergen Institute Discussion Paper 10-105/3, Available at SSRN: https://ssrn.com/abstract=1695362 or http://dx.doi.org/10.2139/ssrn.1695362

Hans Koster (Contact Author)

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

Jan Rouwendal

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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