Spatial Impacts of Microneighborhood Physical Disorder on Property Resale Values in Columbus, Ohio

Abstract

Although a large number of studies have examined the impact of housing and neighborhood characteristics on housing prices, they have not systematically considered the impact of physical conditions of the immediate neighborhood on housing prices, specifically conditions associated with physical disorder. Most likely, this failure has occurred because such data do not exist in published form. The main purpose of this study is to focus on the impact of physical disorder at the microneighborhood level on property resale values by using a hedonic-price-model approach. The results highlight the costs that neighbors may inflict on one another by not maintaining their houses and neighborhood. For the first time, the results provide specific estimates of the cost associated with individual physical-disorder attributes. The results are also indicative of the importance externalities play in neighborhood change and the need for policy intervention in preventing neighborhood decline.