The Impact of LEED Neighborhood Certification on Condo Prices

23 Pages Posted: 4 Aug 2015

See all articles by Julia Freybote

Julia Freybote

Portland State University

Hua Sun

Iowa State University

Xi Yang

Portland State University - School of Urban Studies and Planning

Multiple version iconThere are 2 versions of this paper

Date Written: Fall 2015

Abstract

The U.S. Green Building Council offers LEED certification for existing and new neighborhood developments that meet sustainable urban development standards. Features of sustainable urban development have been found to positively affect residential sales prices. We investigate whether the intangible labeling effects of LEED neighborhood certification add a premium to the sales prices of LEED and non‐LEED–certified condos. Using a quasi‐experiment, transaction data from Portland, Oregon, and a spatio‐temporal autoregressive (STAR) model, we find no evidence that the intangible labeling effects of LEED neighborhood certification directly or indirectly affect sales prices. Our results suggest that, contrary to LEED building certification, which we find adds a premium to condo sales prices, the LEED neighborhood label by itself fails to add value for condo buyers. Explanations for our findings include market acceptance, neighborhood delineation issues and the free rider problem as it relates to public goods.

Suggested Citation

Freybote, Julia and Sun, Hua and Yang, Xi, The Impact of LEED Neighborhood Certification on Condo Prices (Fall 2015). Real Estate Economics, Vol. 43, Issue 3, pp. 586-608, 2015. Available at SSRN: https://ssrn.com/abstract=2639428 or http://dx.doi.org/10.1111/1540-6229.12078

Julia Freybote (Contact Author)

Portland State University ( email )

PO Box 751
Portland, OR 97207
United States

Hua Sun

Iowa State University ( email )

Ames, IA 50011-2063
United States
1-5152947514 (Phone)

Xi Yang

Portland State University - School of Urban Studies and Planning ( email )

United States

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