Going Green - Impact On Residential Property Values

Abstract

Hedonic pricing model is generally used to empirically understand the relationship between various housing characteristics and the housing values. In the past hedonic studies have looked at the relationship between the housing prices and structural features, environmental amenities, neighborhood characteristics, time variables and even financing. But real estate researchers have greatly overlooked to study the impact of greenness on residential properties though there has been a huge interest among the researchers and practitioners on green buildings. This study poses the primary question of if any potential relationship exists between greenness and property values. This study further extends the research question to find out if there is any impact on property values as a result of the mandatory green building programs. The study finds significant positive relationship between the greenness and the residential property prices. The study also finds significant positive relationship between greenness in Frisco adding premium to the property values.