Abstract
This study is the first to perform a focalized analysis on city development, sustainable urban planning, and the negative impact of slum area disamenity on property valuation in suburban and posh areas of the Islamabad region, Pakistan. Slums exist in almost every country in the world. However, in the process of urbanization and city development, researchers have focused merely on the crumbled infrastructure, crimes, and other social problems associated with slums. Studies have covered the adverse effects of these factors on property value, although this unmatched study is the first to examine the negative impact of slum proximity on the valuation of properties in the surrounding areas and on the rental value of houses located in Islamabad. The survey method is applied to obtain feedback from inhabitants, and the study incorporated the hedonic price model to assess rental values within a range of one kilometer from selected slum areas. The findings revealed that slum neighborhoods negatively impact sustainable house rental values, as compared with the rental values of houses located far away. Rents became higher as the distance from the slums increased. The results showed that having slums in the vicinity caused a decline of almost 10% in rent. However, the rental value of a similar house unit, located 500 meters away, was found to be almost 10% higher. In the semi-log model, house rental values increased by approximately 12.40% at a distance of one kilometer from slums, and vice versa. This study will use residents’ feedback to help government officials and policymakers to resolve slum issues, which is essential for maintaining sustainable development and adequate city planning. This study sample’s findings are not generalizable to all slums, as the results are specific to this region.
Highlights
Slums exist in the neighborhood of posh areas and the exterior of big cities because the latter attract people for economic reasons
The structure of this study is systematically comprised of steps, covering a survey of slums and surrounding residents, a literature review based on the hedonic price model, and a summary of the previous studies that cover the negative external impacts
The estimated effect of slum areas on property rental values was the key area of interest
Summary
Slums exist in the neighborhood of posh areas and the exterior of big cities because the latter attract people for economic reasons. The government of Pakistan owns only the legal slums and allocates funds for infrastructure development, while unauthorized sluSmusstaainraebiulitnyl2a0w18f,u10l,axnFdORarPeEnERotRcEoVnIEsWidered for development funds. Such3tyopf e20s of slums exist in the surroundings of Islamabad city’s residential sectors, and people face a lack of necdeesvseiltoiepsm, denetterfuionrdaste. The structure of this study is systematically comprised of steps, covering a survey of slums and surrounding residents, a literature review based on the hedonic price model, and a summary of the previous studies that cover the negative external impacts. This study has recorded the rent price of the ground-floor portion of houses located in slum areas, whether the residents were house renters, tenants, or the house owners. The last section of this study draws the conclusion, makes recommendations, and indicates policy implications
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