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The Value of Homes in Cluster Development Residential Districts: The Relative Significance of the Permanent Open Spaces Associated with Clusters

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Abstract

This study uses the hedonic framework to look at an aspect of planning and its effects on property values. Specifically, the study examines the impacts of cluster residential development on home value using data on Lower Gwynedd Township (Pennsylvania, USA). Other factors remaining constant, the study finds that properties located within cluster developments (CLUS) attract premium prices of roughly 3.9 %, on average, relative to properties in conventional developments. However, part of the 3.9 % price premium is attributable to the permanent open spaces which are parts and parcels of clusters. When the variable for open space (OPEN) is introduced, the cluster (CLUS) premium reduces to 2.02 % suggesting the relative importance the permanent open spaces. The open space variable (OPEN) is associated with a premium of as much as 5.2 %, on average. The density of development variable (DENSITY) is significantly negative at conventional levels. The normative implication of the density finding is that raising permitted densities, per se, in a sub-urban setting where market densities are lower than permitted densities, will have adverse impacts on home value. The results of this study provide empirical support for sustainable, greener, residential cluster development.

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Notes

  1. Inspired by the Utopian novel Looking Backward, Howard published his book To-morrow: a Peaceful Path to Real Reform in 1898 (which was reissued in 1902 as Garden Cities of To-morrow). His ideal garden city would house 32,000 people on a site of 6,000 ac. (2,400 ha), planned on a concentric pattern with open spaces, public parks and six radial boulevards, 120 ft (37 m) wide, extending from the centre. The garden city would be self-sufficient and when it reached full population, a further garden city would be developed nearby. Howard envisaged a cluster of several garden cities as satellites of a central city of 50,000 people, linked by road and rail. Howard organized the Garden City Association in 1899. Two garden cities were founded on Howard’s ideas: Letchworth Garden City and Welwyn Garden City, both in Hertfordshire, England. Howard’s successor as chairman of the Garden City Association was Sir Frederic Osborn, who extended the movement to regional planning. The concept was adopted again in England after World War II, when the New Towns Act triggered the development of many new communities based on Howard’s egalitarian vision.

  2. See Lower Gwynedd Township Zoning Ordinance, Title Six Zoning, 06-15-2009.

  3. The general zoning requirements for the “AA-1” residential zoning district are as follows: residential district with a lot area of not less than 70,000 square feet for every building; number of dwelling units shall not exceed 0.45 dwelling units per developable acre over the developable area of the entire tract; and a minimum lot with of not less than 225 ft at the building line shall be provided for every dwelling. The corresponding requirements for the “A-1” residential zoning district are as follows: residential district with a lot area of not less than 80,000 square feet for every building where neither public sewer nor public water is available, not less than 60,000 square feet where either of public sewer or public water is available, and not less than 35,000 square feet when both public sewer and public water are available; the number of dwelling units shall not exceed 0.90 dwelling units per developable acre over the developable area of the entire tract; and a minimum lot with of not less than 175 ft at the building line shall be provided for every dwelling.

  4. See Montgomery County Housing Units Build Report, Montgomery County Planning Commission, 2008.

  5. The BOA database is compiled by division of Information and Technology Solutions, Montgomery County Courthouse, P.O. Box 311-Suite 808, Norristown, 19404-0311.

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Acknowledgments

I would like to thank the anonymous reviewers for their comments that helped improve the paper. I would also like to thank Joseph A. Zadlo, the Zoning Officer of Lower Gwynedd Township for information on the cluster developments. All errors and omissions remain my Own.

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  1. FSBM, Temple University, Philadelphia, PA, 19122, USA

    Paul K. Asabere

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Correspondence to Paul K. Asabere.

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Asabere, P.K. The Value of Homes in Cluster Development Residential Districts: The Relative Significance of the Permanent Open Spaces Associated with Clusters. J Real Estate Finan Econ 48, 244–255 (2014). https://doi.org/10.1007/s11146-012-9383-y

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