New Urbanism and the value of neighborhood design

Plaut, P. O., & Boarnet, M. G.

Plaut, P. O., & Boarnet, M. G. (2003). New Urbanism and the value of neighborhood design. Journal of Architectural and Planning Research, 20(3), 254–265.

There has been considerable debate over "New Urbanism" as a design strategy for adapting physical space to human needs. Among the interesting questions is whether people are willing to pay a premium to be able to live in areas characterized by New Urbanism design principles. If so, this willingness should be reflected in housing values. We test the hypothesis that urban design, specifically the design attributes associated with New Urbanism, are reflected in housing prices, using a data set for Haifa, Israel. House sales from 1988 through 1996 are analyzed for three neighborhoods in which there are similar socioeconomic compositions, public services, schools, property taxes, and other amenities. One of the neighborhoods has many characteristics of New Urbanism design, while the other two are more traditional urban or suburban developments. Hedonic regression analysis is used to control structure-specific characteristics, and an analysis of the regression values across neighborhoods shows a statistically significant price premium in the New Urbanism neighborhood. The evidence suggests that persons are willing to pay for living in a New Urbanism neighborhood, other things held equal.

Main finding
The authors' analysis finds a positive relationship between real estate value and New Urbanist design features, such as mixed land use, public transportation, and grid street patterns. They suggest more analysis be done to isolate the impact of specific features.

Description of method used in the article
The authors utilize a statistical methodology known as hedonic price analysis which treats real estate prices as a sum of values based on home and neighborhood characteristics.

Of practical use

Organising categories

Other or N/A
3D / Digital / Datasets
Urban Planning
Physical types
Geographic locations