Airports in the urban landscape: externalities, stigmatization and housing market

Abstract

The construction, expansion and operation of airports within the urban landscape cause both positive and negative externalities. Several planning tools are used in practice to limit negative environmental externalities and mitigate conflicts between non-compatible urban land uses. In Poland the special planning zones - Limited Use Areas - are introduced around the airport to impose restrictions related to sensitive land uses (e.g. hospitals, schools, care homes) and sometimes also related to residential land use. In case of the latter, the restrictions introduced in Polish Limited Use Areas are non-existent or minimal at best, yet the introduction of such special planning zones brings public attention to airport-related negative externalities (mainly aircraft noise) and potentially stigmatizes the area. The main purpose of this study is to verify the view that the official introduction of Limited Use Areas regulation by the State affects houses prices in the local market. The study was conducted in Poland for two medium sized airports located in Poznan and Gdansk, before and after public planning intervention around the airport. We apply, among others, a non-spatial and spatial difference-in-difference framework and geographic weighted regression to evaluate the impact of potential stigmatization caused by the introduction of the limited use areas. The findings indicate that public planning intervention had a spatially varied impact on the house prices, and we observed temporal adjustment of house prices, along with the changing perceptions in the area stigmatized by the enforcement of the limited use area around the airport. We also demonstrate that the effect varies between the cities investigate