Real Estate Values and Urban Quality: A Multiple Linear Regression Model for Defining an Urban Quality Index

Sebastiano Carbonara,Marco Faustoferri,Davide Stefano

doi:10.3390/su132413635

Abstract

Urban quality, real estate values and property taxation are different factors that participate in defining how a city is governed. Real estate values are largely determined by the characteristics of urban environments in which properties are located and, thus, by quality of the location. Beginning with these considerations, this paper explores the theme of urban quality through a study of property values that seeks to define all physical (and thus measurable) characteristics that participate in defining urban quality. For this purpose, a multiple linear regression model was developed for reading the residential real estate market in the city of Pescara (Italy). In addition to the intrinsic characteristics of a property (floor area, period of construction/renovation, level, building typology and presence of a garage), input also included extrinsic data represented by the Urban Quality Index. Scientific literature on this theme tells us that many independent variables influence real estate prices, although all are linked to a set of intrinsic characteristics (property-specific) and to a set of extrinsic characteristics (specific to the urban context in which the property is located) and, thus, to the quality of urban environments. The index developed was produced by the analytical and simultaneous reading of four macrosystems with the greatest impact on urban quality: environment, infrastructure, settlement and services (each with its own subsystems). The results obtained made it possible to redefine proportional ratios between various parts of the city of Pescara, based on a specific Urban Quality Index, and to recalculate market property values used to calculate taxes in an attempt to resolve the inequality that persists in this field.

Highlights

Published: 9 December 2021The evolution of the urban environment through dynamic processes of innovation contributes to the transformation of the original territorial dimension of a city
The index developed by the model based on a reading of property values has permitted the definition of all of the physical characteristics that participate in the definition of urban quality
The model is objective, replicable and scalable:. Because it is structured by quantitative elements devoid of any form of subjective alteration; Replicable, because the systems considered comprise the structural components of the city; Scalable, because the essential elements of the city can be found at diverse scales

Summary

Introduction

Published: 9 December 2021The evolution of the urban environment through dynamic processes of innovation contributes to the transformation of the original territorial dimension of a city. Changes to the structure of the city [1], the introduction of new infrastructures or facilities in an urban area or further variations to the urban fabric resulting from politicaladministrative decisions [2,3] and/or spatial management are all factors with a positive or negative influence on the formation of real estate prices [4]. They can modify the functional aspects of spaces and, as a reflection, the quality of life for residents. Adopt approaches that confirm changes taking place return the city to the centre of debate: to understand the scarcity and abundance of the characteristics of which the urban environment is a global expression in order to select and implement appropriate strategies for pursuing a sustainable increase in urban quality [6].

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Conclusion