Purpose
Even as multi-story apartment building development proposals in existing neighbourhoods represent a substantial component of policy debate at local planning boards, there is limited evidence for the impact of such residential developments on surrounding apartment values. This paper aims to address the void in knowledge, and the impact of multi-story apartment building developments on apartment values in residential high-rise areas located outside city and district centres is investigated in Helsinki Metropolitan Area, Finland.
Design/methodology/approach
Whether a multi-story apartment building development is followed by an increase in housing values depends on both positive and negative externalities. To specify valuation effects of proximate development projects, advanced research design combining matched sample methodology and hedonic-based difference-in-difference approach is used.
Findings
It appears from the analysis that completion of a single multi-story apartment building has an immediate positive impact on apartment values within 300 metre radius, while there is no statistically significant impact on price trend.
Research limitations/implications
This paper studies apartment values only in Helsinki Metropolitan Area, Finland, and it is important to notice that local regulations and market conditions may have a notable impact on the outcomes.
Originality/value
This study is the first of its kind to provide with statistically significant evidence for positive impacts from multi-story apartment building development in Finnish residential high-rise areas and may have a crucial role in helping to dispel prejudices related to such developments.
It is widely agreed that dynamics of building stocks are relatively poorly known even if it is recognized to be an important research topic. Better understanding of building stock dynamics and future development is crucial, e.g., for sustainable management of the built environment as various analyses require long-term projections of building stock development. Recognizing the uncertainty in relation to long-term modeling, we propose a transparent calculation-based QuantiSTOCK model for modeling building stock development. Our approach not only provides a tangible tool for understanding development when selected assumptions are valid but also, most importantly, allows for studying the sensitivity of results to alternative developments of the key variables. Therefore, this relatively simple modeling approach provides fruitful grounds for understanding the impact of different key variables, which is needed to facilitate meaningful debate on different housing, land use, and environment-related policies. The QuantiSTOCK model may be extended in numerous ways and lays the groundwork for modeling the future developments of building stocks. The presented model may be used in a wide range of analyses ranging from assessing housing demand at the regional level to providing input for defining sustainable pathways towards climate targets. Due to the availability of high-quality data, the Finnish building stock provided a great test arena for the model development.
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