Increase In Property Values Research Articles

05/01047 Cost functions and the electric utility industry. A contribution to the debate on deregulation

Cost effectiveness for consumers of solar electric systems has been achieved in the California residential market due to Time-of-Use Net Metering, a tiered electric rate structure with high rates, and subsidies by the state government.Three different approaches test and validate this hypothesis for a large fraction of consumers. Solar electricity can generate rates of return of 11–20% exceeding most other common investments, can increase property value by more than the cost to install the system, and generate a positive cash flow if financed.This paper suggests further study in the commercial sector and a survey to document evidence of increased home resale value.

The Impact of Forest Density on Property Values

Abstract We applied a simple hedonic price model to determine the benefits of fuel reduction treatments reflected in residential housing values in Flagstaff, Arizona, in hopes of finding a way to address increasing treatment costs. Results show that the fuel reduction treatments that convert high canopy closure would increase property values significantly ($190 per 1,000 m2 per home). The treatments that lower forest density are not only one means to reduce wildfire hazard but also to enhance scenic beauty and improve residential property values.

A Total Returns Index for Investor Housing in New Zealand

The absence of a total returns index makes it difficult to compare the performance of investor housing between regions and with other asset classes in New Zealand. As a first step in overcoming this deficiency, the authors integrated information from two existing government data bases, the first covering residential rents and the second covering house sales. The relationship between gross rents and net income was established by surveying a random sample of residential property investors. This survey also provided base line information showing private sector investor housing typically sits midway between the lower quartile and median house price bands. The total returns indices confirm that the overall decline in net yields over the last decade has been more than offset by increases in property values.

Financial payback on California residential solar electric systems

Cost effectiveness for consumers of solar electric systems has been achieved in the California residential market due to Time-of-Use Net Metering, a tiered electric rate structure with high rates, and subsidies by the state government. Three different approaches test and validate this hypothesis for a large fraction of consumers. Solar electricity can generate rates of return of 11–20% exceeding most other common investments, can increase property value by more than the cost to install the system, and generate a positive cash flow if financed. This paper suggests further study in the commercial sector and a survey to document evidence of increased home resale value.

Tax increment financing: interaction between two overlapping jurisdictions

This paper analyzes the interaction between two overlapping jurisdictions (a school district and a city), when one of them (the city) uses TIF (tax increment financing) to finance an improvement in the provision of its public good. Both jurisdictions levy taxes on property, and they provide different public goods. The city is not allowed to raise its tax rate to increase public good provision, but since the increment in the public good causes property values to increase, the city's revenue is higher with the new level of public good. However, if this new revenue is not enough to finance the new public good level, then TIF allows the city to “capture,” for a limited period of time, all extra revenues the school district obtains due to the increase in property values. Then the city and the school district choose the public good level to satisfy their budget constraints with the goal of maximizing total property values. Two different results regarding efficiency of public good provision are obtained depending on the equilibrium concept used. With Nash behavior, the result is underprovision of the public good provided by the school district. The second, and more interesting, case is when the school district takes into account that its decisions affect the provision of the city's public good. In this “leader–follower” equilibrium, where the school district plays the role of the leader, the results show that the provision of the school district public good depends on how the city's public good is provided. If the city's public good is underprovided (overprovided) then the school district's public good is overprovided (underprovided).

Homeowners, property values, and the political economy of the school voucher

A school voucher would decrease property values in neighborhoods with superior public schools and increase property values in neighborhoods with inferior public schools. These potential gains and losses may influence voting on voucher initiatives, particularly for homeowners without school children. This paper examines that possibility, using a survey of potential voters on California's 2000 voucher initiative. We find evidence that homeowners voted to protect their property values. For homeowners without school children, the probability of voting for the voucher was 39 percent if they lived in neighborhoods with superior public schools and 56 percent if they lived in neighborhoods with inferior schools.

Do Housing Rehabs Pay Their Way? A National Case Study

This research focuses on if housing rehabilitation by community development corporations pays its own way. The recent experience of ten local housing organizations in the Neighborhood Reinvestment Corporation network is examined. These organizations assist homeowners in rehabbing existing units and acquire, rehab and transfer units to new occupants. The findings indicate that rehabbed housing units provide substantial benefits to the local economy. The rehabbed units return $0.55, on average, for every local government dollar invested. In addition, economic benefits such as increased property values and tax base, and construction jobs and permanent jobs were created and sustained.

Public Access to Lake Superior and Attribute Values of Proximate Non-Shoreline Property

Increasing shoreline development along the Great Lakes has caused public concern regarding the loss of associated ecological attributes. In more remote areas, such as Lake Superior's shoreline, informal public access to shoreline across private property is becoming less common as lakeshore properties are subdivided and developed. Shoreline development increases property values and is an important source of tax revenue for local governments. Using hedonic analysis 162 non-shoreline properties within 3 miles of Michigan's Lake Superior shoreline were examined to determine if proximity to formal public access to the Lake increased property value. Distance to public access to Lake Superior was a statistically significant variable in explaining land value per acre, as were variables for parcel size, county, stumpage value, view, road access, and distance to towns. Fifty-three shoreline parcels were also examined. For shoreline parcels, parcel size, lakefront length, beach type, county, and distance to a small town were statistically significant. Distance to public access to Lake Superior was not statistically significant for shoreline properties.

The value of open spaces in residential land use

The preservation of open spaces has become an important policy topic in many regions. Policy tools that have been used include: cluster zoning; transferable development rights; proposed land taxes to fund purchases of remaining open spaces; and private organizations that buy land. This paper develops a theoretical model of how different types of open spaces are valued by residential land owners living near these open spaces, and then, using a hedonic pricing model, tests hypotheses concerning the extent to which these different types of open spaces are capitalized into housing prices. The empirical results from Howard County, a rapidly developing county in Maryland, USA, show that “permanent” open space increases near-by residential land values over three times as much as an equivalent amount of “developable” open space. This methodology can be used to help inform policy decisions concerning open space preservation, such as effectively targeting certain areas for preservation, or as a means of creative financing of the purchase of conservation easements, through the increase in property taxes, resulting from the associated increase in property values.

612 Consumers Knowledge, Practices, and Environmental Attitudes on Lawn Care

Homeowner surveys conducted in Edina, Minn., showed varying levels of horticultural knowledge on lawn care. A majority of consumers, 75%, knew the value of lawn clippings was equivalent to one fertilization treatment, but 72% did not know the amount of fertilizer needed for a medium maintenance lawn. A total of 77% indicated spring as the single best time to control broadleaf weeds, and 39% thought spring was the best time to fertilize, whereas 48% indicating fall as the best time to fertilize. Current practices included the following: leaving clippings on the lawn, 75%; bagged and removed clippings,16%; 83% apply fertilize in the spring; 67% fertilize in the fall; 61% apply herbicides; 74% mow weekly; 51% mow at 2–3″, but 27% mow at 1–2″. Environmental attitudes were rated on a scale of 1 to 4, with 1 being strongly agree and 4 being strongly disagree. Consumers strongly agreed that pesticide (1.5) and fertilizer (1.7) applications should be posted in public areas. The statement “A well kept lawn increases property values” also found strong agreement, (1.6). Consumers disagreed that pesticides are not harmful to the environment (3.3) and public health (3.3); while fertilizers were only slightly less harmful to the environment (3.0) and public health (2.9). A 10% weed population was acceptable (2.2) but 25% was not (3.3). Areas for consumer education exist in the time and amount of fertilizer, timing of weed control, and mowing height. Because of negative attitudes toward pesticides and fertilizers, recommendations for medium to low input grasses should be well received.

Measuring the Impact of Light Rail Systems on Single-Family Home Values: A Hedonic Approach with Geographic Information System Application

In theory, proximity to light rail transit (LRT) may have two different effects on residential property values. On the one hand, accessibility (proximity to LRT stations) may increase property values. On the other hand, nuisance effects (proximity to the LRT line and stations) may decrease property values. Existing empirical studies are inconclusive, and failure to separate the effects of accessibility from the nuisance effects may explain some of the ambiguity. An examination is presented of the impact of the light rail system (MAX) in Portland, Oregon, on single-family home values using distance to rail stations as a proxy for accessibility and distance to the line itself as a proxy for nuisance effects. Geographic information system techniques are employed to create spatial-related variables and merge data from various sources. The study results confirm the hypothesis that the light rail has both a positive effect (accessibility effect) and a negative effect (nuisance effect) on single-family home values. The positive effect dominates the negative effect, which implies a declining price gradient as one moves away from LRT stations for several hundred meters. Without controlling for the nuisance effect of the distance to the rail line, the estimated coefficients on distance from stations appear to be biased and would underestimate the accessibility effect. The finding of an independent nuisance effect suggests that previous hedonic models may have reached contradictory results because the nuisance effect differs with different types of rail or other local characteristics.

Railroads and Property Taxes

Nineteenth century state and local governments continued to invest in railroads and other internal improvement projects long after it was clear that these projects were financially very risky. This paper provides a motivation for public involvement in internal improvements by estimating the effect of railroad construction on property values from 1850 to 1910. Using Census data on true and assessed valuations, we find that the increase in property values associated with railroad construction, would, at typical levels of taxation, pay for a substantial share, if not all, of the construction costs solely on the basis of property tax revenues. The effect of construction on property values declined with mileage up to several thousand miles, which may explain why state governments typically were involved in construction of the initial systems. The effect, however, was nonlinear and increased at higher mileages, consistent with the persistent participation of county and municipal governments.

Landscape Sustainability: Environmental, Human, and Financial Factors

When determining whether landscaping is sustainable, we should consider environmental, financial, and human factors. Environmental factors include the capacity of the landscape to damage or heal the system in which it is placed, the environmental effects of the cultural techniques and products used to install and maintain the landscape, and the ability of that landscape to endure without environmentally damaging inputs. Financial factors include the cost of the landscape compared to the economic return in terms of increased property values, the ability to attract and hold industry in the neighborhood, and user fees paid by people attracted to an area by the landscaping. Human factors include the effects on the landscape on mood, employee retention, and health and activity of the individuals who interact with the environment. The ideal landscape would be sustainable in all three of these areas, meaning there is more benefit than cost environmentally, financially, and humanly.

Mixed Uses and the Redevelopment Option

This paper considers how the potential for mixing uses and redevelopment impact property value. Operating flexibility of this type is found to significantly increase property value when the correlation between payouts from different property types is low or when redevelopment costs are low. The ability to mix uses and redevelop over time is also shown to affect the timing of initial land development. The shape of the development boundary is shown to differ considerably depending on whether marginal revenue is constant or decreasing to scale. Both policy and empirical implications concerning the effects of multiple‐use zoning are discussed.

Givings and Takings

Abstract This is another article on regulatory “takings”—but with a new twist. It takes a close look at the role of state and local government in increasing-rather than decreasing-property values, and evaluates how that fact should affect regulatory takings analysis. One important premise is that local governments take actions that both increase and decrease property values, and that regulatory takings analysis needs to recognize both sides of the equation. A second premise is that the law of inverse condemnation holds some lessons about how and when it is fair to offset property value increases and decreases.

Tourism and waterfront renewal: assessing residential perception in Newport, Rhode Island, USA

The purpose of this study is to examine the perception of harbor residents on tourism and waterfront redevelopments in Newport, Rhode Island. In the summer of 1992, about 160 surveys were conducted of households located directly in the tourism district. The results indicate that by and large the waterfront community perceives the current traffic conditions, inadequate parking, lack of privacy, and commercial intrusion into neighborhoods to be the consequences of increased tourism. Negative attitudes towards waterfront renewal are associated with perceived difficulties in having access to the water, lack of affordable housing, continued marine pollution, and the proliferation of non-water-dependent uses in the harbor. Conversely, several favorable reactions raised by residents included increased property values, successful historic preservation, and the participation in tourist-related events and amenities. Despite their geographic proximity to the business district, the development activities on the waterfront and the opportunities generated by tourism, few residents feel they have benefited economically from these advantages. Currently, the political climate in Newport is such that a comprehensive harbor management plan can become a reality. It is hoped that residents will then have an opportunity to incorporate their issues into policies of the plan.

LANDSCAPE SUSTAINABILITY: ENVIRONMENTAL, HUMAN AND FINANCIAL FACTORS

When determining whether landscaping is sustainable, we should consider environmental, financial and human factors. Environmental factors include: 1) the capacity of the landscape to damage or heal the system within which it is placed, 2) the environmental effects of the cultural techniques and products used in the installation and maintenance of that landscape, and 3) the ability of that landscape to endure without environmentally damaging inputs. Financial factors include: 1) the cost of the landscape compared to the economic return in terms of increased property values, 2) ability to attract and hold industry in a neighborhood, and 3) user fees paid by people attracted to an area by the landscaping. Human factors include: 1) the effects of the landscape on mood, employee retention, health and 2) activity of the individuals who interact with the environment. The ideal landscape would be sustainable in all three of these areas, meaning that there is more benefit than cost environmentally, financially and humanly.

A Von Thünen Model of Crime, Casinos and Property Values in New Jersey

Urban economic models suggest that, ceteris paribus, land values diminish with distance from a central business district (CBD) which 'produces' employment, income and other amenities. A new industry like casino gaming may have jobs and increased income associated with it. These amenities will induce an increase in property values. The size of that increase diminishes with distance from the city centre. The new industry may have the negative by-product of crime, which is hypothesised to have a reversed, although systematic, effect upon land values. That is, it pays to live in the hinterlands far from the source of crime. Thus, theoretically, the net effect of amenities as a function of distance from the central city is ambiguous. Applying the model to Atlantic City shows that the casinos have brought jobs, additional income and greater real estate values to the region, but the positive impact diminishes with distance from the city centre. However, crime has increased at a rate greater than that which existed prior to the casinos. The cost of crime resulting from casinos, as reflected in unrealised assessed real estate valuation, appears to be on average $5.2m per square mile in 1986 (current prices) in the South Jersey area. For an average community in the area it would amount in 1986 to a total of approximately $105m.

Investment Diversion and Equity Release: The Macroeconomic Consequences of Increasing Property Values?

The 1970s' argument that investment in land and property diverted finance from 'productive' investment in manufacturing is shown to be fallacious. The seller of property at higher prices will recirculate that investment into productive sectors, and arguments that the distinction between services and manufacturing is important are erroneous. The 1980s' argument that households are able to release their increased equity gain from house price inflation to finance consumption is the converse of this argument. Rising house prices will require potential buyers to save more in advance of purchase. This paper argues that both lines of reasoning neglect the influence of rising property values on the rate of savings. Rising property prices lead people to believe their wealth to have increased and thus depress their level of savings and increase consumption. This is seen as a particularly British problem because of the impact of land use planning restrictions on land supply, and thus land prices, and the recent shift from rates to the community charge.

Are Property Values Being Adversely Affected by Crime?

Examines the nexus of economic development, induced crime and property values focused on casino gambling introduced to Atlantic City, New Jersey. Uses econometric techniques to calculate the effects to which monetary increase in property values is directly attributable to the casinos and the extent to which these values have been diminished due to crime. Concludes that the gain in property taxes that a municipality may realise when a reduction in its property crime rate imbalances assessed values.