Community Environment and the Market Value of Single-Family Homes: The Effect of the Dispersion of Land Uses

Abstract

As evidenced by the ubiquitous practice of zoning, many Americans feel that neighboring land uses strongly affect property values, especially those of single-family homes. It is somewhat surprising then that there exist only a few empirical studies designed to test for the existence and strength of negative externalities of neighboring land uses, and that the results of these studies are contradictory. William Stull' found that the median value of owner-occupied single-family homes was significantly affected by the amount of nonsingle-family land use within forty suburban towns in the Boston metropolitan area. But a study of Monroe County, New York2 and two studies of Pittsburgh3 concluded that no significant externalities exist. This study partially rectifies the discrepancy in these results by demonstrating that externalities caused by land use cannot be properly described by the simple definitions of "neighborhood" used in the previous studies.