# RECORD a9aa8ff2e63af06927e90407046655fab060c351
# TITLE: The Size and Spatial Extent of Neighborhood Price Impacts of Infill Development: Scale Matters?
# YEAR: 2022.0  VENUE: Journal of real estate finance and economics  DOI: 10.1007/s11146-022-09916-x
# AUTHORS: C. Nygaard; G. Galster; Stephen Glackin
# PAGES: 30  CANDIDATE TABLE PAGES (1-based): [18]
# ABSTRACT: Infill investments are argued to mitigate environmental footprints, regenerate places and accommodating population growth, but frequently generate local opposition. However, there is a dearth of knowledge around how different types of infill affect different segments of local property markets, how persistent effects are and how far they reach. Using detailed geocoded infill development activity and sales data, we test the price level and trajectory impacts of five infill types, distinguished by the net scale of additional dwellings, on property prices within five concentric 100-meter rings. Using an adjusted interrupted time-series estimation strategy with locality, property and neighborhood characteristic controls we find that developments that generate a net increase in dwellings of four or less, typically result in an appreciation in the average sales prices of proximate dwellings. Moderate and large-scale developments generate negative price effects, but these effects predominantly affect apartments and townhouses, not the dominant detached house submarket. Over time, amenity effects and local market potential may even have a further positive expectation effect on detached house prices. Infill type differentiation shows that urban densification may result in positive affordability outcome in the apartment submarket, but has the opposite effects in the detached house submarket. Divergent price trajectories also contribute to widening wealth disparities.


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Vol.:(0123456789)
The Journal of Real Estate Finance and Economics (2024) 69:277–306
https://doi.org/10.1007/s11146-022-09916-x
1 3
The Size and Spatial Extent of Neighborhood Price Impacts 
of Infill Development: Scale Matters?
Christian A. Nygaard1,2   · George Galster3 · Stephen Glackin1
Accepted: 1 July 2022 / Published online: 8 August 2022 
© The Author(s) 2022
Abstract
Infill investments are argued to mitigate environmental footprints, regenerate 
places and accommodating population growth, but frequently generate local 
opposition. However, there is a dearth of knowledge around how different types 
of infill affect different segments of local property markets, how persistent 
effects are and how far they reach. Using detailed geocoded infill development 
activity and sales data, we test the price level and trajectory impacts of five 
infill types, distinguished by the net scale of additional dwellings, on property 
prices within five concentric 100-meter rings. Using an adjusted interrupted 
time-series estimation strategy with locality, property and neighborhood char-
acteristic controls we find that developments that generate a net increase in 
dwellings of four or less, typically result in an appreciation in the average sales 
prices of proximate dwellings. Moderate and large-scale developments generate 
negative price effects, but these effects predominantly affect apartments and 
townhouses, not the dominant detached house submarket. Over time, amenity 
effects and local market potential may even have a further positive expecta-
tion effect on detached house prices. Infill type differentiation shows that urban 
densification may result in positive affordability outcome in the apartment sub-
market, but has the opposite effects in the detached house submarket. Divergent 
price trajectories also contribute to widening wealth disparities.
Keywords  Residential infill investment · Urban consolidation · Spillovers · Property 
market adjustment · AITS regression
 *	 Christian A. Nygaard 
	
anygaard@swin.edu.au
1	
Centre for Urban Transitions, Swinburne University of Technology, Melbourne, Australia
2	
Department of Economics, University of Reading, Reading, UK
3	
Department of Urban Studies and Planning, Wayne State University, Detroit, MI, USA


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294
	
C. A. Nygaard et al.
1 3
results are based on the level and trend impacts following the commencement of the 
first infill development of type k, and the trend impact following completion of the 
last infill development of type k. "Robustness Tests" section discusses variations to 
this specification.
Table 5   AITS estimates for infill development price effects, by development type (%)
Note: N (all) = 418,273; N (houses) = 340,129; N (townhouses/apartments) = 78,144. Values in Table 5 
are the exponentiated log coefficients. Robust standard errors/t-values omitted due to space. §/*/**/*** 
significant at 0.05/0.01/0.001 level. Na = not applicable/not estimated separately due to high correlation 
(r > .9) between the two post-infill trends. All models contain controls for property, neighborhood, loca-
tion characteristic, and fixed effects for location and time as per Eq. (1), summary statistics in Table 4
All property sales
KDR
One- dwelling
Small-
scale
Moderate-scale
Large-
scale
Before infill, price level at distance:
 1-100 m
1.721***
0.241
1.299***
1.551***
2.146***
 101-200 m
0.491*
0.219
-0.089
1.058***
0.446
 201-300 m
0.725***
-0.077
0.042
0.651**
-0.411
 301-400 m
0.180
-0.956***
0.339§
-0.063
-0.448
 401-500 m
0.364§
-1.575***
0.003
0.252
-0.422
Before infill, price trend at distance
 1-100 m
-0.128**
-0.303***
-0.221***
-0.084
-0.304***
 101-200 m
-0.105**
-0.262***
-0.109**
-0.003
-0.130§
 201-300 m
-0.093*
-0.139**
-0.080*
0.099*
0.095
 301-400 m
-0.061
0.003
-0.094*
0.011
0.149*
 401-500 m
0.022
0.026
-0.085*
-0.007
0.096§
After infill, price level at distance
 1-100 m
0.571*
0.771***
0.735**
-0.539
-4.570***
 101-200 m
0.708***
0.586***
0.751***
-0.658*
-0.215
 201-300 m
0.626***
0.658***
0.609***
-0.688**
1.306*
 301-400 m
0.499**
0.711***
0.166
-0.521*
-0.114
 401-500 m
0.513**
0.576***
0.437**
-0.330
1.038*
After first infill start, price trend at distance
 1-100 m
0.335***
0.344***
0.103*
0.199§
0.563***
 101-200 m
0.248***
0.252***
0.122***
0.107
0.266*
 201-300 m
0.210***
0.114***
0.049
-0.037
-0.219*
 301-400 m
0.285***
0.066*
0.063*
0.127*
-0.300**
 401-500 m
0.201***
0.120***
0.052§
0.118*
-0.308***
After last infill end, price trend at distance
 1-100 m
Na.
Na.
Na.
-0.237*
-0.363§
 101-200 m
Na.
Na.
Na.
-0.061
-0.511***
 201-300 m
Na.
Na.
Na.
0.036
0.083
 301-400 m
Na.
Na.
Na.
0.037
0.323**
 401-500 m
Na.
Na.
Na.
-0.029
0.228*


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295
1 3
The Size and Spatial Extent of Neighborhood Price Impacts of…
Because the combined effects of levels and trends potentially display distinct 
temporal profiles, we find it convenient to graph the price profiles for standardized 
homes in each distance ring both before and after the infill development; see Fig. 2. 
Note that for infill KDR, one-dwelling and small-scale developments the ‘After last 
infill end, price trend at distance’ is simply a continuation of the ‘After first infill 
start, price trend at distance’ because, as noted above, the intervening period was 
too short to reliably estimate a price trajectory. For moderate- and large-scale devel-
opments the two trend components are identified and graphed separately. Figure 2 
shows level and trend for the five years preceding an infill development, the five 
years following the first infill development, and the five years after completion of the 
last infill development. From the discussion in the "Introduction" and "Residential 
Infill Investment in Existing Neighborhoods: Previous Studies and Our Analytical 
Strategy" section, it is clear that infill development can generate a number of out-
comes depending on type of development and local market context. We therefore 
consider the price level and trend effects separately by type of development.
Geographic Selection of Infill Development
Before turning to the impact results, it is revealing to examine the distinct geo-
graphic selection processes at work for different types of Melbourne infill develop-
ers, as revealed by the “before infill” variables shown in Table 5, panel 1. Across 
each of the infill types, apart from one-dwelling infills, developments are more 
likely to occur within 100 m of somewhat higher-value environments. The ‘before 
infill, level’ coefficients indicates mean sales prices were consistently 1 to 2% 
-0.5
0
0.5
1
1.5
2
2.5
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Before infill
Aer first infill
begins
Aern last infill
ends
KDR, 101-200m
-1.5
-1
-0.5
0
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
Before infill
Aer first infill
begins
Aern last infill
ends
One dwelling, 101-200m
-0.6
-0.4
-0.2
0
0.2
0.4
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Before infill
Aer first infill
begins
Aern last infill
ends
Small-scale, 101-200m
0
1
2
3
4
1
2
3
4
5
1
2
3
4
5
1
2
3
4 5
Before infill
Aer first infill
begins
Aern last infill
ends
KDR, 1-100m
-2
-1.5
-1
-0.5
0
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
Before infill
Aer first infill
begins
Aern last infill
ends
One dwelling, 1-100m
-0.5
0
0.5
1
1.5
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Before infill
Aer first infill
begins
Aern last infill
ends
Small-scale, 1-100m
0
0.5
1
1.5
2
1 2 3 4 5 1 2 3 4 5 1 2 3 4
5
Before infill
Aer first infill
begins
Aern last infill
ends
Moderate-scale, 1-100m
-4
-2
0
2
4
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
Before infill
Aer first infill
begins
Aern last infill
ends
Large-scale, 1-100m
0
0.5
1
1.5
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Before infill
Aer first infill
begins
Aern last infill
ends
Moderate-scale, 101-200m
0
0.5
1
1.5
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Before infill
Aer first infill
begins
Aern last infill
ends
Large-scale, 101-200m
0
1
2
3
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Before infill
Aer first infill
begins
Aern last infill
ends
KDR, 201-300m
-0.8
-0.6
-0.4
-0.2
0
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Before infill
Aer first infill
begins
Aern last infill
ends
One dwelling, 201-300m
0
0.5
1
1.5
2
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Before infill
Aer first infill
begins
Aern last infill
ends
Moderate-scale, 201-300m
-0.8
-0.6
-0.4
-0.2
0
0.2
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Before infill
Aer first infill
begins
Aern last infill
ends
Small-scale, 201-300m
-1
0
1
2
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Before infill
Aer first infill
begins
Aern last infill
ends
Large-scale, 201-300m
0
1
2
3
4
1
2
3
4
5
1
2
3
4
5
1
2
3
4 5
Before infill
Aer first infill
begins
Aern last infill
ends
KDR, 301-400m
-1.5
-1
-0.5
0
0.5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
Before infill
Aer first infill
begins
Aern last infill
ends
One dwelling, 301-400m
-1
-0.8
-0.6
-0.4
-0.2
0
1 2 3 4 5 1 2 3 4 5 1 2 3 4
5
Before infill
Aer first infill
begins
Aern last infill
ends
Small-scale, 301-400m
-0.5
0
0.5
1
1 2 3 4 5 1 2 3 4 5 1 2 3 4
5
Before infill
Aer first infill
begins
Aern last infill
ends
Moderate-scale, 301-400m
-0.2
0
0.2
0.4
0.6
0.8
1
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Before infill
Aer first infill
begins
Aern last infill
ends
Large-scale, 301-400m
0
0.5
1
1.5
2
2.5
3
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Before infill
Aer first infill
begins
Aern last infill
ends
KDR, 401-500m
-2
-1.5
-1
-0.5
0
0.5
1
2
3
4
5
1
2
3
4
5
1
2
3
4
5
Before infill
Aer first infill
begins
Aern last infill
ends
One dwelling, 401-500m
-1
-0.8
-0.6
-0.4
-0.2
0
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Before infill
Aer first infill
begins
Aern last infill
ends
Small-scale, 401-500m
0
0.5
1
1.5
1 2 3 4 5 1 2 3 4 5 1 2 3 4
5
Before infill
Aer first infill
begins
Aern last infill
ends
Moderate-scale, 401-500m
-1
-0.5
0
0.5
1
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Before infill
Aer first infill
begins
Aern last infill
ends
Large-scale, 401-500m
Fig. 2   Home sales price effects of infill development in Melbourne, by distance and development type