Gated Communities and Property Values
- Topics:
- Market Studies
- Tags:
- Business Operations,
- Community,
- Corporate Insurance,
- Finance,
- Financial Planning,
- Insurance,
- Investment,
- School Of Business,
- Street
- Source:
- School of Business
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Overview: We empirically examine the effect of private and gated streets on housing prices in a well-established neighborhood of St. Louis, one of the first urban areas in the United States to develop private streets. A relatively homogeneous housing stock inside and outside the gated community, in which portions of the same street are sometimes inside and sometimes outside of the gates, allows a near-perfect natural experiment. Using a semi-log hedonic specification and the robust estimation procedures , we find that houses in the gated community command an economically significant price premium, other factors held constant. We further decompose the premium into two parts: First, that part due to the privacy-security effects of gating; and second, that part due to private subdivision and homeowner association imposed design restrictions, which operate as insurance against negative externalities.
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Format: PDF | Size: 169KB | Date: Jun 2001 | Pages: 36
