Gates, guards and patrols: impacts of community security features on home values

Abstract

PurposeThis study aims to investigate the price effects, if any, of various types of residential developments' security mechanisms.Design/methodology/approachPrevious literature suggests home buyers pay a premium for homes located within gated communities, but no prior study investigates the various levels of community security features often associated with gated communities. This study extends this literature by examining the presence of gates, guards and patrols (individually and in combination) within residential communities. The findings indicate that home prices are significantly higher in communities that have gates, guards, or guards and patrols. In the presence of guards and patrols, however, the premium associated with gates disappears. These results suggest that the previously identified premium for homes in gated communities may be more appropriately interpreted as a premium for enhanced security provided by guards and patrols within the communities.FindingsPrices of homes in communities exhibit premiums for security gates, security guards and security patrols, but the premium associated with security gates is less impactful than security guards and security patrols.Research limitations/implicationsDevelopers, home buyers, appraisers and other parties should carefully consider neighborhood security features when evaluating home prices in communities.Practical implicationsThe presence of security guards and security patrols implies higher home prices in residential communities and are more impactful than security gates alone.Originality/valuePrior research reports a price premium for homes in gated communities. This study contributes to that literature and finds that the premium associated with security guards and security patrols dominates the mere presence of security gates.