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Open Access
Article
Publication date: 6 July 2021

Mats Wilhelmsson, Vania Ceccato and Manne Gerell

This study aims to analyse the effect of gun-related violence on housing values, controlling for the area's crime levels and locational factors. Previous studies that aimed to…

1872

Abstract

Purpose

This study aims to analyse the effect of gun-related violence on housing values, controlling for the area's crime levels and locational factors. Previous studies that aimed to find a causal connection between crime and housing values used instrument variables to solve the endogeneity problem. Here, the authors have instead been able to take advantage of the fact that shootings have occurred in random time and space. This has made it possible to estimate models to create windows around the shooting (event) and to estimate the causal effects of the shootings. Thus, the authors aim to contribute to the regression discontinuity design method in this context to estimate the short-term effects.

Design/methodology/approach

Using the regression discontinuity design method, the authors can estimate the short-term effects of shootings.

Findings

Findings from the analysis indicate that shootings directly affect those who are impacted by shootings and indirectly affect the environments where shootings occur. The indirect effect of shootings is momentary as it is capitalised directly in housing values in the immediate area. The effect also appears to be relatively long-term and persistent as housing values have not returned to the price level before the shooting 100–200 days after the shooting. The capitalisation effect is higher the closer one gets to the central parts of the city. On the other hand, the capitalisation effect is not higher or lower in areas with a higher crime rate per capita.

Originality/value

The article contributes to the previous literature in several ways. First and foremost, it provides an explicit analysis of shootings in built-up areas and their hypothesised effect on property prices through the impact on attractiveness and perceived safety. As far as the authors know, no study has analysed this issue on the international level or in Sweden. In this way, the authors aim to develop a study that can provide critical knowledge about one of the adverse effects of shootings. The authors also contribute to the literature by utilising unique data material, which allows the authors to merge information from the police about the exact location of shootings in the Stockholm area with data on sales of apartments in the same residential areas. In addition to the exact location of the shootings (coordinates), the authors also have access to data about whether the shootings led to injuries or deaths. Thus, the authors have separated the effect of shootings and fatal shootings, which has not been done before. Finally, the authors set out to highlight the results as a contribution to the debate on shootings.

Details

Journal of European Real Estate Research, vol. 15 no. 1
Type: Research Article
ISSN: 1753-9269

Keywords

Open Access
Article
Publication date: 27 May 2021

Mohammad Ismail, Abukar Warsame and Mats Wilhelmsson

The purpose of this study is to analyse the trends regarding housing segregation over the past 10–20 years and determine whether housing segregation has a spillover effect on…

1215

Abstract

Purpose

The purpose of this study is to analyse the trends regarding housing segregation over the past 10–20 years and determine whether housing segregation has a spillover effect on neighbouring housing areas. Namely, the authors set out to determine whether proximity to a specific type of segregated housing market has a negative impact on nearby housing markets while proximity to another type of segregated market has a positive impact.

Design/methodology/approach

For the purposes of this paper, the authors must combine information on segregation within a city with information on property values in the city. The authors have, therefore, used data on the income of the population and data on housing values taken from housing transactions. The case study used is the city of Stockholm, the capital of Sweden. The empirical analysis will be the estimation of the traditional hedonic pricing model. It will be estimated for the condominium market.

Findings

The results indicate that segregation, when measured as income sorting, has increased over time in some of the housing markets. Its effects on housing values in neighbouring housing areas are significant and statistically significant.

Research limitations/implications

A better understanding of the different potential spillover effects on housing prices in relation to the spatial distribution of various income groups would be beneficial in determining appropriate property assessment levels. In other words, awareness of this spillover effect could improve existing property assessment methods and provide local governments with extra information to make an informed decision on policies and services needed in different neighbourhoods.

Practical implications

On housing prices emanating from proximity to segregated areas with high income differs from segregated areas with low income, policies that address socio-economic costs and benefits, as well as property assessment levels, should reflect this pronounced difference. On the property level, positive spillover on housing prices near high-income segregated areas will cause an increase in the number of higher income groups and exacerbate segregation based on income. Contrarily, negative spillover on housing prices near low-income areas might discourage high-income households from moving to a location near low-income segregated areas. Local government should be aware of these spillover effects on housing prices to ensure that policies intended to reduce socioeconomic segregation, such as residential and income segregation, produce desirable results.

Social implications

Furthermore, a good estimation of these spillover effects on housing prices would allow local governments to carry out a cost–benefit analysis for policies intended to combat segregation and invest in deprived communities.

Originality/value

The main contribution of this paper is to go beyond the traditional studies of segregation that mainly emphasise residential segregation based on income levels, i.e. low-income or high-income households. The authors have analysed the spillover effect of proximity to hot spots (high income) and cold spots (low income) on the housing values of nearby condominiums or single-family homes within segregated areas in Stockholm Municipality in 2013.

Details

Journal of European Real Estate Research , vol. 14 no. 2
Type: Research Article
ISSN: 1753-9269

Keywords

Open Access
Article
Publication date: 5 March 2020

Fredrik Brunes, Cecilia Hermansson, Han-Suck Song and Mats Wilhelmsson

This paper aims to analyze how nearby property prices are affected by new construction projects in Stockholm. If there is an impact on property prices, the authors endeavor to…

3004

Abstract

Purpose

This paper aims to analyze how nearby property prices are affected by new construction projects in Stockholm. If there is an impact on property prices, the authors endeavor to investigate whether the effects vary among different areas within the municipality, for different groups of inhabitants and for different types of housing (i.e. public versus private housing).

Design/methodology/approach

The authors use a difference-in-difference specification in a hedonic model, and the sample consists of more than 90,000 observations over the period 2005-2013.

Findings

The results are robust and indicate that house prices in nearby areas increase following the completion of infill development. The results also indicate that infill development has a positive spillover effect on nearby dwelling prices only in areas with lower incomes, more public housing units and more inhabitants born abroad.

Originality/value

It provides an analysis on how nearby property prices are affected by new construction projects by creating a restricted control area, so as to make the treatment group and the control group more homogeneous. Thus, it mitigates any potential problems with spatial dependency, which can cause biased standard errors.

Details

Journal of European Real Estate Research , vol. 13 no. 1
Type: Research Article
ISSN: 1753-9269

Keywords

Open Access
Article
Publication date: 15 August 2023

Mats Wilhelmsson

This study aims to examine the impact of housing construction on single-family housing values and the implications for urban development.

532

Abstract

Purpose

This study aims to examine the impact of housing construction on single-family housing values and the implications for urban development.

Design/methodology/approach

To achieve this objective, the author used the difference-in-difference methodology to examine the effect of multifamily and single-family housing construction on surrounding single-family homes in Stockholm, Sweden. The author analysed data from approximately 480 housing construction projects between 2009 and 2014 and 17,000 single-family detached house transactions between 2005 and 2018.

Findings

The research found that multifamily construction projects did not affect the value of surrounding single-family homes, while single-family home construction had a negative impact. The author attributes this result to single-family housing projects typically located in areas with initially positive externalities, while multifamily housing projects are often located on the edge of areas with negative externalities before construction.

Research limitations/implications

The research is limited by its focus on a specific geographic area and time frame, and future research could expand the scope to include other cities and regions and different periods. Additionally, further research could examine the impact of housing construction on other economic factors beyond housing values.

Practical implications

The research has practical implications for urban planners and policymakers. They should consider the potential negative impact of new single-family home construction on existing single-family housing areas while balancing the need for new housing in urban areas. By carefully evaluating construction locations, policymakers can create more sustainable, livable and equitable urban environments that benefit all members of society.

Originality/value

This research paper contributes to the field of housing economics by examining the impact of housing construction on single-family housing values in the context of urban development and climate change mitigation. Using a difference-in-difference methodology, the study provides evidence of the price effect of multifamily and single-family housing construction on surrounding single-family homes, which has important policy implications for urban planners and policymakers. By identifying the negative impact of single-family home construction on surrounding areas and highlighting the need for careful evaluation of construction locations, the research provides valuable insights for creating sustainable, livable and equitable urban environments that benefit all members of society.

Details

International Journal of Housing Markets and Analysis, vol. 16 no. 7
Type: Research Article
ISSN: 1753-8270

Keywords

Open Access
Article
Publication date: 16 August 2021

Mats Wilhelmsson, Mohammad Ismail and Abukar Warsame

This study aims to measure the occurrence of gentrification and to relate gentrification with housing values.

14924

Abstract

Purpose

This study aims to measure the occurrence of gentrification and to relate gentrification with housing values.

Design/methodology/approach

The authors have used Getis-Ord statistics to identify and quantify gentrification in different residential areas in a case study of Stockholm, Sweden. Gentrification will be measured in two dimensions, namely, income and population. In step two, this measure is included in a traditional hedonic pricing model where the intention is to explain future housing prices.

Findings

The results indicate that the parameter estimate is statistically significant, suggesting that gentrification contributes to higher housing values in gentrified areas and near gentrified neighbourhoods. This latter possible spillover effect of house prices due to gentrification by income and population was similar in both the hedonic price and treatment effect models. According to the hedonic price model, proximity to the gentrified area increases housing value by around 6%–8%. The spillover effect on price distribution seems to be consistent and stable in gentrified areas.

Originality/value

A few studies estimate the effect of gentrification on property values. Those studies focussed on analysing the impacts of gentrification in higher rents and increasing house prices within the gentrifying areas, not gentrification on property prices in neighbouring areas. Hence, one of the paper’s contributions is to bridge the gap in previous studies by measuring gentrification’s impact on neighbouring housing prices.

Details

International Journal of Housing Markets and Analysis, vol. 15 no. 4
Type: Research Article
ISSN: 1753-8270

Keywords

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Article
Publication date: 4 May 2012

138

Abstract

Details

Journal of European Real Estate Research, vol. 5 no. 1
Type: Research Article
ISSN: 1753-9269

Keywords

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