The impact of remote work on green space values in regional housing markets

Abstract

We examine the extent to which the increased prevalence of work from home (WFH) due to the COVID-19 pandemic has made green amenities more desirable.22Data provided by Zillow through the Zillow Transaction and Assessment Dataset (ZTRAX). More information on accessing the data can be found at http://www.zillow.com/ztrax. The results and opinions are those of the authors and do not reflect the position of the Zillow Group. Specifically, we focus on ten metropolitan statistical areas (MSAs) in the United States (Baltimore, Chicago, Cleveland, Los Angeles, Minneapolis/St. Paul, New York City, Philadelphia, Pittsburgh, St. Louis, and Tampa) and use a hedonic pricing approach to identify changes in the implicit prices of yard space and park proximity. We use a combination of data sources, including the Zillow Transaction and Assessment Database (ZTRAX), Open Street Maps, Longitudinal Employer Household Dynamics Origin–Destination Employment Statistics (LODES), National Land Cover Database (NLCD), and the Environmental Protection Agency’s EnviroAtlas to study the interactions between the exposure of a given neighborhood to WFH shock and private yard space, as well as proximity to the nearest park. Our findings suggest that home buyers in all the MSAs, except Minneapolis and Pittsburgh, assigned a greater value to private green amenities during the post-COVID period. However, for the MSAs of Los Angeles, New York, Philadelphia, and Pittsburgh, the marginal willingness to pay (MWTP) for private green spaces decreased in the post-COVID period in the areas with large WFH shocks. No significant change in the MWTP for proximity to public green spaces is noted in the post-COVID period for most MSAs. An event study of yard space reveals that most MSAs experienced an increase in the hedonic price of yard space in the post-COVID period. In the pre-COVID period, for many MSAs, the hedonic price of yard space was decreasing over the years, and this trend reversed in the post-COVID period. These results suggest that the preferred amenity bundles of people living in major cities in the U.S. have shifted as a result of changes in their commutes and work habits.