Housing Prices Remain Steady Under Smart Growth Policies

"Our evidence shows that greater centralization in an urban area results in a reduced proportion of upper-priced homes in that urban area and a lower median priced house for the entire area," said Robert Wassmer, one of the report's co-authors.

From the abstract: "This paper examines the relationship between various quantitative measures of urban centralization and urban housing prices through the use of a 2000 data set from the 452 Census designated urbanized areas in the United States. An empirical study of this type is necessary because: (1) the theoretical influence of creating more centralized urban areas – or what many would consider less “sprawl” – on what people pay for housing is indeterminate, (2) now popular “Smart Growth” policies advocate more centralized urban areas, and (3) some have argued that a cost of this centralization is an increase in the price of homes.

After controlling for differences across United States urbanized areas in residents’ economic status and demographics, number and type of households, climate, household growth, non-residential land uses, and the structural characteristics of houses; we find that a more centralized urban urbanized area exhibits a lower median home value and percentage of homes in an upper end price category. Therefore we offer no evidence to support the contention that a successful effort to further centralize an urban area raises the price of homes in that urban area."

[Editor's note: The link below is to a 100kb PDF.]