The Impact of New Urbanism on Single Family Housing Values: The Case of Issaquah Highlands

Abstract

New Urbanism has been a prevalent issue in architecture and planning fields over the last few decades as an alternative to reforming the sprawl pattern of suburban growth. New Urbanist design principles have been adopted for many housing and neighborhood planning efforts in the United States. Do the attributes of New Urbanism serve as an impetus for improving economic value through increasing property value? This study compares Issaquah Highlands’ home prices with those of traditional suburban single family homes in the City of Issaquah. The null hypothesis is that consumers are willing to pay similar prices for houses in Issaquah Highlands and for houses in the surrounding conventional subdivisions. The principal database used consists of US Census Washington State Geospatial Data Archive (WAGDA), and the King County Tax Assessments. The final data set consists of 1,075 single family housings over the three-year period from 2012 to 2014 based on sale records throughout the City of Issaquah. This study uses the hedonic pricing technique to assess the impact of New Urbanism on the value of single family residences through linear and semi-log functional form. Descriptive statistics show that more expensive properties are located in Issaquah Highlands ($638,358), followed by All Sales ($622,066), and Out of Issaquah Highlands ($608,673). 45.1 percent of sampled properties are in Issaquah highlands, and 54.9 percent are outside of Issaquah Highlands. The findings suggest that a binary variable representing New Urbanism indicates that people are willing to pay a $40,985-$56,762 premium (approximately 6.2-6.5 percent) for houses in Issaquah Highlands. The present study is valuable to urban planners, developers, and policy makers by providing several implications for future research and policy development in the urban planning field.