Promoting green residential buildings by increasing homebuyers’ willingness to pay: Evidence from Sino-Singapore Tianjin Eco-city in China

Abstract

Abstract Increasing willingness to pay (WTP) is critical to promote green residential buildings (GRBs), but residents' WTP for GRBs has not yet been well studied. To examine residents' WTP for GRBs and its determinants, a survey was conducted among 511 current GRB occupants living in Sino-Singapore Tianjin Eco-city in China, and latent class regression was used to analyze the heterogeneity of their preferences. Four factors of residential satisfaction were identified—operation and maintenance, comfort and health, architectural and construction quality, and accessibility of GRBs—and these determinants of WTP had different effects on different groups of residents. The mean WTP of the majority (64.5%) of residents was 374 CNY/m2 (about 54 USD), accounting for only 2.2% of the housing price. Four segments of residents with heterogeneous preferences were identified. The dominant segment (accounting for 64.5%) was “Indifferent residents with low WTP”. The second largest segment (accounting for 18.9%) was “Critical residents with 1000 + WTP”, followed by the third largest segment (13.3%) — “High WTP residents driven by comfort and health”, while the smallest segment (3.3%) was “Operation and maintenance-sensitive residents”. The policy implications are that stakeholders should work to enhance the operational performance of GRBs, thereby improving residents’ satisfaction and increasing their WTP.