# RECORD b150aa7a491222e57926fd7829879b82c8d7c8d6 # TITLE: The Impacts of Environmental Amenities on Rental Value of Houses and a Pathway Towards Sustainable Urban Development Align with SDG 11 # YEAR: 2024.0 VENUE: Journal of Lifestyle and SDGs Review DOI: 10.47172/2965-730x.sdgsreview.v5.n02.pe02806 # AUTHORS: Md Abdus Sobhan; Md. Elias Hossain; Rashed Ahmed; Md. Yahia Bapari # PAGES: 22 CANDIDATE TABLE PAGES (1-based): [11, 12, 13, 14, 15] # ABSTRACT: Objective: The objective of the study is to assess the impacts of environmental amenities on rental value of houses and formulate the pathway for sustainable urban development align with Sustainable Development Goals 11.   Theoretical Framework: The hedonic pricing model is an effective theoretical foundation for examining influence of environmental amenities and dis-amenities on house rental prices. It investigates how environmental factors influence house rental prices and promote sustainable urban development goals.   Method: The study is based on 210 primary data which are collected by random sampling survey of tenants living in Rajshahi City, Bangladesh. The hedonic regression method is used for assessing house rent determinants and willingness to pay formula is used for hedonic valuation of environmental attributes.   Results and Discussion: The study found four factors- income of tenant, house structure characteristics, neighborhood characteristics and environmental amenities including ventilation, open space proximity, drainage management, waterlogging and landfill by wastes which affect houses rent. In planned areas, proximity to open spaces and ventilation increases the rental value by 77.27% and 24.46% respectively than that of unplanned area. The willingness to pay for environmental amenities including open space, ventilation and proper drainage is BDT162.148 (US $1.35), BDT 164.055 (US $1.36, and BDT 64.271 (US $0.53) respectively from their average rent in planned area. In contrast, in unplanned areas, tenants are willing to pay more BDT 45.061 (US $0.37) for open space closer proximity, BDT 64.693 (US $0.53) for ventilation and BDT 78.536 (US $0.65) for proper drainage from their average rent.   Research Implications: The study propose that urban planning should prioritize environmental improvements, real estate developers should increase the value of houses through improved amenities and emphasizes the tenant preferences in developing sustainable residential zones.   Originality/Value: This study presents empirical evidence on the valuation of environmental amenities in Bangladeshi housing markets, adding new insights to the fields of urban economics and sustainability. ===== PAGE 1 (score 9, numeric-paren 0, table-words 0, var-words 8) ===== SDGsReview | Florida, USA | VOL. 5| e02806| pag: 01-22| 2025. 1 THE IMPACTS OF ENVIRONMENTAL AMENITIES ON RENTAL VALUE OF HOUSES AND A PATHWAY TOWARDS SUSTAINABLE URBAN DEVELOPMENT ALIGN WITH SDG 11 Md. Abdus Sobhan1 Md. Elias Hossain2 Rashed Ahmed3 Md. Yahia Bapari4 ABSTRACT Objective: The objective of the study is to assess the impacts of environmental amenities on rental value of houses and formulate the pathway for sustainable urban development align with Sustainable Development Goals 11. Theoretical Framework: The hedonic pricing model is an effective theoretical foundation for examining influence of environmental amenities and dis-amenities on house rental prices. It investigates how environmental factors influence house rental prices and promote sustainable urban development goals. Method: The study is based on 210 primary data which are collected by random sampling survey of tenants living in Rajshahi City, Bangladesh. The hedonic regression method is used for assessing house rent determinants and willingness to pay formula is used for hedonic valuation of environmental attributes. Results and Discussion: The study found four factors- income of tenant, house structure characteristics, neighborhood characteristics and environmental amenities including ventilation, open space proximity, drainage management, waterlogging and landfill by wastes which affect houses rent. In planned areas, proximity to open spaces and ventilation increases the rental value by 77.27% and 24.46% respectively than that of unplanned area. The willingness to pay for environmental amenities including open space, ventilation and proper drainage is BDT162.148 (US $1.35), BDT 164.055 (US $1.36, and BDT 64.271 (US $0.53) respectively from their average rent in planned area. In contrast, in unplanned areas, tenants are willing to pay more BDT 45.061 (US $0.37) for open space closer proximity, BDT 64.693 (US $0.53) for ventilation and BDT 78.536 (US $0.65) for proper drainage from their average rent. Research Implications: The study propose that urban planning should prioritize environmental improvements, real estate developers should increase the value of houses through improved amenities and emphasizes the tenant preferences in developing sustainable residential zones. Originality/Value: This study presents empirical evidence on the valuation of environmental amenities in Bangladeshi housing markets, adding new insights to the fields of urban economics and sustainability. Keywords: Environmental Amenity, Hedonic Pricing, House Rent, Sustainable City, Bangladesh, Sustainable Development Goals (SDGs). 1 Department of Economics, Varendra university, Rajshahi-6205, Bangladesh. E-mail: sobhanshuvo2199@gmail.com 2 Department of Economics, University of Rajshahi, Rajshahi-6205, Bangladesh. E-mail: eliaseco@ru.ac.bd 3 Department of Economics, Comilla University, Comilla, Bangladesh. E-mail: rashed@cou.ac.bd 4 Department of Economics, Pabna University of Science and Technology, Pabna-6600, Bangladesh. E-mail: yahia.bapari@pust.ac.bd ===== PAGE 11 (score 20, numeric-paren 1, table-words 5, var-words 7) ===== SDGsReview | Florida, USA | VOL. 5| e02806| pag: 01-22| 2025. 11 Sobhan, M., A., Hossain, M., E., Ahmed, R., Bapari, M., Y. (2025) The Impacts of Environmental Amenities on Rental Value of Houses and a Pathway Towards Sustainable Urban Development Align with SDG 11 School distance Kilometer 1.53 0.96 2.15 Open space dis. Meter 138 83 144 Ventilation 1-5 scale 3.19 3.29 2.81 Waterlogging 0=No 57.14% 79% 66.36% 1=Yes 42.86% 21% 33.64% Landfill 0=No 59.52% 91% 80% 1=Yes 40.48% 9% 20% Drainage/Sewage 1-5 scale 3.22 3.58 2.61 In planned residential areas, most of the neighborhood attributes are closer to access while in unplanned areas are opposite in this regard. For one of the most important sets of attributes is environmental attributes in the housing market. Table 2 reports that the average distance of open space proximity is around 138 meters in overall area and varying from 5 to 300 meter. The average ventilation and drainage system score in the overall area is around 3.19 and 3.22 respectively. The average waterlogging and landfill presence in overall area is around 79 and 91 percent respectively. There is a quite difference regarding environmental attributes in planned and unplanned residential areas where comparatively higher ventilation scores, closer proximity to open spaces, improved drainage system, less severity of waterlog and landfill exist into unplanned residential areas. Rajshahi City is renowned for living in because of its natural beauty and cleanness. The reputation as a clean city, it has led to influx many people migrated from another city to this city. As a result, the city is rapidly becoming more urbanized, and the housing market is expanding, endangering the environment. This study is based on hedonic pricing method to find out the determinants of rental value of houses and valuation for environmental amenities. 4.2 THE DETERMINANTS OF HOUSE RENT IN OVERALL RAJSHAHI CITY CORPORATION AREA Table 3 Regression Result of the Hedonic Pricing Approach of Overall Area. Variables Coefficient Robust Std. Err. t-ratio P-Value Income .0000039*** .00000063 6.14 0.000 Age of house -0.0050*** 0.0020 -2.99 0.003 ===== PAGE 12 (score 33, numeric-paren 6, table-words 5, var-words 13) ===== SDGsReview | Florida, USA | VOL. 5| e02806| pag: 01-22| 2025. 12 Sobhan, M., A., Hossain, M., E., Ahmed, R., Bapari, M., Y. (2025) The Impacts of Environmental Amenities on Rental Value of Houses and a Pathway Towards Sustainable Urban Development Align with SDG 11 Room Number 0.0102*** 0.0032 3.13 0.002 Garage 0.0110 0.0139 0.80 0.427 Work place distance -0.0066** 0.0029 -2.28 0.024 School distance -0.0039 0.0099 -0.40 0.688 Open space distance -0.0052* 0.0027 -2.90 0.060 Ventilation 0.0121** 0.0059 2.05 0.042 Waterlogging -0.0151* 0.0083 -3.82 0.070 Landfill -0.0101 0.0075 -1.36 0.176 Drainage/Sewage 0.0222*** 0.0053 4.18 0.000 Constant 3.6671 0.0449 81.66 0.000 N= 210; F(11,198); = 669.82; Prob.>F= 0.0000 ; R2 = 0.9543; VIF=4.07 Note: Significant at: ***p<0.01, **p<0.05, *p<0.1 The results estimated from the hedonic pricing approach of equation (8) are reported in Table 3. It is found that the value of R2 is 0.9543 indicates that about 95% of variations in the dependent variable are explained by the variations in explanatory variables taken in the model. Multicollinearity problem is diagnosed by VIF test which is 4.07, specifies that the regression model is free from multicollinearity problem. From the obtained result it is also revealed that the sum of residual is equal to zero and the distribution of residual is normal The Table highlights the determinants of house rent are classified by four attributes. Income is found positively and highly significant associated with house rent at 1 percent level of significance, keeping other things being constant. In regarding structural attributes, the age of building, the number of rooms, space for garages are the most relevant factors that determine the extent of house rent. The number of rooms is significant at the 5 percent level, indicating that an increase of one unit in the number of rooms is connected with a 1 percent rise in housing rent, provided other factors remain constant. The workplace distance is significant at 5% level of significance and negatively influences house rent. The most important and relevant attribute is the environmental attributes which include distance of open space; at least a small playground from house, the condition of ventilation of house which is measured by 1-5 point scale where 1 indicates the strongly unsatisfactory condition and 5 indicates strongly satisfactory condition, waterlogging and landfill are categorical variable where 0 indicates absence of that factor and 1 indicates presence of that factor, and drainage/sewage system which is also measured by 1-5 point scale where 1 indicates the strongly unsatisfactory condition and 5 indicates strongly satisfactory condition. Here, distance of open ===== PAGE 13 (score 33, numeric-paren 8, table-words 4, var-words 13) ===== SDGsReview | Florida, USA | VOL. 5| e02806| pag: 01-22| 2025. 13 Sobhan, M., A., Hossain, M., E., Ahmed, R., Bapari, M., Y. (2025) The Impacts of Environmental Amenities on Rental Value of Houses and a Pathway Towards Sustainable Urban Development Align with SDG 11 space; at least a small playground from house is significant at 10% level of significance and negatively associated with house rent. Truly speaking, tenants are less agreed to pay more for the house if open space distance increases. It implies that a one unit increase in the open space distance is associated with a reduction in house rent by 0.5 percent, being remain constant other factors. The ventilation and drainage are measured by 1–5-point scale and it is observed that they are positively significant at 5 and 1 percent level of significance respectively. It implies that a one-unit increase in the condition of ventilation and drainage is associated with rise in house rent by 1 and 2 percent respectively, being remain constant other factors. The rest of the factors like waterlogging and landfill are negatively associated reducing house rent by 1 percent being remain constant other factors. 4.3 DETERMINANTS OF HOUSE RENT IN PLANNED AREA, RAJSHAHI CITY CORPORATION The planned residential area where everything is monitored by central authority, it is found that income is significantly associated with house rent at 1 percent level of significance. Among the three structural attributes, the number of rooms are significant at 5 percent level of significance which implies that, a one-unit increase in the number of room is associated with rise in house rent by 0.3 percent, being remain constant other factors. Table 4 Regression Result of a Hedonic pricing Approach of Planned Area. Explanatory variable Coefficient Robust Std. Err. t-ratio P-Value Income .0000011*** .0000003 3.22 0.002 Age of house -0.0044*** 0.0016 -2.68 0.009 Room number 0.0039** 0.0017 2.23 0.028 Garage 0.0137*** 0.0043 3.16 0.002 Work place distance -0.0100*** 0.0030 -3.33 0.001 School distance -0.0217 0.0165 -1.32 0.192 Open space distance -0.0117*** 0.0038 -5.25 0.000 Ventilation 0.0117*** 0.0027 4.27 0.000 Waterlogging -0.0118* 0.0062 -2.91 0.059 Landfill -0.0028 0.0041 -0.68 0.497 Drainage/Sewage 0.0046** 0.0022 2.05 0.043 Constant 4.0504 0.0410 98.76 0.000 ===== PAGE 14 (score 27, numeric-paren 3, table-words 5, var-words 11) ===== SDGsReview | Florida, USA | VOL. 5| e02806| pag: 01-22| 2025. 14 Sobhan, M., A., Hossain, M., E., Ahmed, R., Bapari, M., Y. (2025) The Impacts of Environmental Amenities on Rental Value of Houses and a Pathway Towards Sustainable Urban Development Align with SDG 11 The workplace distance is significant at 1% level of significance and negatively influences house rent. Here, distance of open space; at least a small playground from house is significant at 1% level of significance and negatively associated with house rent. It implies that a one-unit increase in the open space distance is associated with reduce in house rent by 1.1 percent, being remain constant other factors. The ventilation and drainage are measured by 5-point scale and it is observed that only ventilation is positively significant at 1 percent level of significance. It implies that a one-unit increase in the condition of ventilation is associated with rise in house rent by 1.1 percent, being remain constant other factors. The drainage is significant at 5 percent level of significance and its sign is positively related to determine the extent of house rent. The rest of the factors like waterlogging and landfill are negatively associated with house rents. 4.4 DETERMINANTS OF HOUSE RENT IN UNPLANNED AREA, RAJSHAHI CITY CORPORATION The rest of the factors like waterlogging and landfill are negatively significant at 10 percent level of significance suggesting that a one-unit increase in waterlogging and landfill associated with reducing house rent by 1 percent being remain constant other factors. These findings highlight the negative impact of underprivileged environmental circumstances on rental value of houses in unplanned areas. Table 5 Regression Result of the Hedonic Pricing Approach of Unplanned Area. Explanatory variable Coefficient Std. Err. t-ratio P-Value Income 0.00000104 .0000005 1.85 0.068 Age of house -0.00008 0.0019 -0.05 0.964 Room number 0.0202* 0.0110 1.83 0.070 Garage 0.0081 0.0079 1.02 0.309 Work place distance -0.0050 * 0.0029 -1.73 0.087 School distance -0.0035 0.0265 -0.14 0.893 Open space distance -0.0066** 0.0032 -2.03 0.045 Ventilation 0.0094 0.0079 1.18 0.240 N= 100; F(11,88); = 196.69; Prob>F= 0.0000 ; R2 = 0.9531; Root MSE= 0.01605; VIF=3.52 Note: Significant at: ***p<0.01, **p<0.05, *p<0.1 ===== PAGE 15 (score 20, numeric-paren 3, table-words 3, var-words 6) ===== SDGsReview | Florida, USA | VOL. 5| e02806| pag: 01-22| 2025. 15 Sobhan, M., A., Hossain, M., E., Ahmed, R., Bapari, M., Y. (2025) The Impacts of Environmental Amenities on Rental Value of Houses and a Pathway Towards Sustainable Urban Development Align with SDG 11 Waterlogging -0.0104* 0.0062 -1.67 0.098 Landfill -0.0146* 0.0075 -1.93 0.056 Drainage/Sewage 0.0114* 0.0059 1.94 0.055 Constant 3.6834 0.1237 29.78 0.000 N= 110; F(11,98); = 99.79; Prob.>F= 0.0000 ; R2 = 0.8798; Root MSE= 0.02678; VIF=3.59 Note: Significant at: ***p<0.01, **p<0.05, *p<0.1 The unplanned area where socio-economic activities are not governed by a central authority it is found that certain factors significantly influence house rents. The distance of open space is significant at 5 percent level of significance and negatively associated with house rent. The ventilation and drainage are positively significant at 10 percent level of significance. Unfortunately, the ventilation is not significant, but its sign is positively related to determine the extent of house rent. 4.5 THE WILLINGNESS TO PAY FOR ENVIRONMENTAL ATTRIBUTES This study reveals the tenant’s willingness to pay value of environmental amenities and dis-amenities and other attributes from estimated coefficients of equation (8) & (9) which is reported in Table 6. In overall area, structural attributes including age of house, the tenants are willing to pay less BDT 51.33 (US $0.42) for age of house whereas willing to pay more for room number, and garage availability are BDT 104.840 (US $0.87) and BDT 113.109 (US $0.94) respectively from their average rent. Table 6 Results of Willingness to Pay Analysis. l Overall Area Planned Area Unplanned Area Attributes WTP(BDT) WTP(US$) WTP(BDT) WTP(US$) WTP(BDT) WTP(US$) Structural Attributes Age house -51.33 -0.42 -61.201 -0.51 -0.54 -0.004 Room number 104.840 0.87 54.472 0.45 139.777 1.16 Garage availability 113.109 0.94 192.292 1.60 55.710 0.46 Neighborhood Attributes Work place proximity -67.27 -0.56 -138.705 -1.15 -34.164 -0.28 School proximity -39.80 -0.33 -299.24 -2.49 -23.933 -0.19 Environmental Attributes ===== PAGE 16 (score 12, numeric-paren 0, table-words 0, var-words 6) ===== SDGsReview | Florida, USA | VOL. 5| e02806| pag: 01-22| 2025. 16 Sobhan, M., A., Hossain, M., E., Ahmed, R., Bapari, M., Y. (2025) The Impacts of Environmental Amenities on Rental Value of Houses and a Pathway Towards Sustainable Urban Development Align with SDG 11 Open space proximity -53.038 -0.44 -162.148 -1.35 -45.061 -0.37 Ventilation availabity 124.488 1.03 164.055 1.36 64.693 0.53 Waterlog presence -153.255 -1.27 -163.525 -1.36 -70.870 -0.59 Landfill presence -102.765 -0.85 -38.977 -0.32 -99.283 -0.82 Drainage 229.560 1.91 64.271 0.53 78.536 0.65 In case of neighborhood attributes including workplace and school proximity, the tenants are willing to pay more BDT 67.27 (US $0.56) and BDT 39.80 (US $0.33) from their average rent because of an additional unit of closer proximity. Among the environmental attributes in case of open space proximity, tenants are willing to pay more BDT 53.038 (US $0.44) from their average rent with an additional unit of closer proximity. In accordance with ventilation facilities and proper drainage management system, the tenants are willing to pay more BDT 124.488 (US $1.03) and BDT 229.560 (US $1.91) from their average rent because of an additional unit increase in 5-point scale from strongly unsatisfactory to strongly satisfactory. In contrast, tenants are willing to pay less BDT 153.255 (US $1.27) and BDT 102.765 (US $0.85) from their average rent because of an additional unit increase in waterlog and landfill availabilities. In the planned area, in case of structural attributes including age of house, the tenants are willing to pay less BDT 61.201 (US $0.51), while are willing to pay more for room numbers, and garage availability are BDT 54.472 (US $0.45) and BDT 192.292 (US $1.60) respectively from their average rent. In case of neighborhood attributes including workplace and school proximity, the tenants are willing to pay more BDT 138.705 (US $1.15) and BDT 299.24 (US $2.49) from their average rent. Regarding environmental attributes due to open space proximity, tenants are willing to pay more BDT 162.148 (US $1.35) from their average rent with an additional unit of closer proximity. Besides, presence of ventilation facilities and proper drainage management system, the tenants are willing to pay more BDT 164.055 (US $1.36) and BDT 64.271 (US $0.53) from their average rent. In contrast, tenants are willing to pay less BDT 163.525 (US