The Increasing Value of Urban Parks in a Growing Metropole

Abstract

Urban parks and public open spaces enhance the quality of life for citizens by offering many different services. This is especially important in growing metropoles, where green space is ever scarcer. We assess the impact of park proximity on house prices, paying specific attention to the impact of park size, the role of other green and blue spaces as possible substitutes, and changes in valuation over time. The study relies on an extensive database of residential property transactions of the past 10 years for the area inside the 5 th ring road of Beijing. The data captures the housing market in a dynamic period of rapid population increase and surging house prices. We find that large parks have a much larger impact than small parks. For parks larger than 20 hectares, price increases can be as large as 6-7%, compared to less than 1% averaged over all parks. Park value decreases significantly, however, with increasing availability of other green and blue spaces, confirming the idea that both are substitutes. Finally, we observe that the appreciation of parks increases over time, and most so for large parks.

Keywords: urban park, Valuation, hedonic pricing, green space