The Effects of Mixed Land Use on Housing Price - Focused on the apartment and general housing prices

Abstract

As a response to the problems of urban sprawl, scholars have suggested New Urbanism and Smart Growth strategies. Among the various components of the land use strategies, mixed land use development has gained increasing attention. However, the effect of mixed-land use has been relatively less investigated. Particularly, little is known about whether housing demanders really want to live in a neighborhood with mixed-land use. In order to identify preferences of the housing demanders on mixed-land use, we attempt to explore the relationship between mixed-land use and housing prices. To do so, we employ the two-stage least square (2SLS) estimator with instrumental variables to account for the endogeneity between mixed-land use and housing prices. Our findings clearly show that the effects of mixed land use on apartment and general housing prices are different. Specifically, mixed land use decreases apartment prices, whereas it increases general housing prices. The results suggest important policy implications that mixed land use policy should be differentiated by the two different housing types such as apartment and general housing.