1# RECORD a9aa8ff2e63af06927e90407046655fab060c3512# TITLE: The Size and Spatial Extent of Neighborhood Price Impacts of Infill Development: Scale Matters?3# YEAR: 2022.0 VENUE: Journal of real estate finance and economics DOI: 10.1007/s11146-022-09916-x4# AUTHORS: C. Nygaard; G. Galster; Stephen Glackin5# PAGES: 30 CANDIDATE TABLE PAGES (1-based): [18]6# 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.789===== PAGE 1 (score 5, numeric-paren 0, table-words 0, var-words 5) =====1011Vol.:(0123456789)12The Journal of Real Estate Finance and Economics (2024) 69:277–30613https://doi.org/10.1007/s11146-022-09916-x141 315The Size and Spatial Extent of Neighborhood Price Impacts 16of Infill Development: Scale Matters?17Christian A. Nygaard1,2 · George Galster3 · Stephen Glackin118Accepted: 1 July 2022 / Published online: 8 August 2022 19© The Author(s) 202220Abstract21Infill investments are argued to mitigate environmental footprints, regenerate 22places and accommodating population growth, but frequently generate local 23opposition. However, there is a dearth of knowledge around how different types 24of infill affect different segments of local property markets, how persistent 25effects are and how far they reach. Using detailed geocoded infill development 26activity and sales data, we test the price level and trajectory impacts of five 27infill types, distinguished by the net scale of additional dwellings, on property 28prices within five concentric 100-meter rings. Using an adjusted interrupted 29time-series estimation strategy with locality, property and neighborhood char-30acteristic controls we find that developments that generate a net increase in 31dwellings of four or less, typically result in an appreciation in the average sales 32prices of proximate dwellings. Moderate and large-scale developments generate 33negative price effects, but these effects predominantly affect apartments and 34townhouses, not the dominant detached house submarket. Over time, amenity 35effects and local market potential may even have a further positive expecta-36tion effect on detached house prices. Infill type differentiation shows that urban 37densification may result in positive affordability outcome in the apartment sub-38market, but has the opposite effects in the detached house submarket. Divergent 39price trajectories also contribute to widening wealth disparities.40Keywords Residential infill investment · Urban consolidation · Spillovers · Property 41market adjustment · AITS regression42 * Christian A. Nygaard 43 44anygaard@swin.edu.au451 46Centre for Urban Transitions, Swinburne University of Technology, Melbourne, Australia472 48Department of Economics, University of Reading, Reading, UK493 50Department of Urban Studies and Planning, Wayne State University, Detroit, MI, USA515253===== PAGE 18 (score 87, numeric-paren 68, table-words 3, var-words 2) =====545529456 57C. A. Nygaard et al.581 359results are based on the level and trend impacts following the commencement of the 60first infill development of type k, and the trend impact following completion of the 61last infill development of type k. "Robustness Tests" section discusses variations to 62this specification.63Table 5 AITS estimates for infill development price effects, by development type (%)64Note: N (all) = 418,273; N (houses) = 340,129; N (townhouses/apartments) = 78,144. Values in Table 5 65are the exponentiated log coefficients. Robust standard errors/t-values omitted due to space. §/*/**/*** 66significant at 0.05/0.01/0.001 level. Na = not applicable/not estimated separately due to high correlation 67(r > .9) between the two post-infill trends. All models contain controls for property, neighborhood, loca-68tion characteristic, and fixed effects for location and time as per Eq. (1), summary statistics in Table 469All property sales70KDR71One- dwelling72Small-73scale74Moderate-scale75Large-76scale77Before infill, price level at distance:78 1-100 m791.721***800.241811.299***821.551***832.146***84 101-200 m850.491*860.21987-0.089881.058***890.44690 201-300 m910.725***92-0.077930.042940.651**95-0.41196 301-400 m970.18098-0.956***990.339§100-0.063101-0.448102 401-500 m1030.364§104-1.575***1050.0031060.252107-0.422108Before infill, price trend at distance109 1-100 m110-0.128**111-0.303***112-0.221***113-0.084114-0.304***115 101-200 m116-0.105**117-0.262***118-0.109**119-0.003120-0.130§121 201-300 m122-0.093*123-0.139**124-0.080*1250.099*1260.095127 301-400 m128-0.0611290.003130-0.094*1310.0111320.149*133 401-500 m1340.0221350.026136-0.085*137-0.0071380.096§139After infill, price level at distance140 1-100 m1410.571*1420.771***1430.735**144-0.539145-4.570***146 101-200 m1470.708***1480.586***1490.751***150-0.658*151-0.215152 201-300 m1530.626***1540.658***1550.609***156-0.688**1571.306*158 301-400 m1590.499**1600.711***1610.166162-0.521*163-0.114164 401-500 m1650.513**1660.576***1670.437**168-0.3301691.038*170After first infill start, price trend at distance171 1-100 m1720.335***1730.344***1740.103*1750.199§1760.563***177 101-200 m1780.248***1790.252***1800.122***1810.1071820.266*183 201-300 m1840.210***1850.114***1860.049187-0.037188-0.219*189 301-400 m1900.285***1910.066*1920.063*1930.127*194-0.300**195 401-500 m1960.201***1970.120***1980.052§1990.118*200-0.308***201After last infill end, price trend at distance202 1-100 m203Na.204Na.205Na.206-0.237*207-0.363§208 101-200 m209Na.210Na.211Na.212-0.061213-0.511***214 201-300 m215Na.216Na.217Na.2180.0362190.083220 301-400 m221Na.222Na.223Na.2240.0372250.323**226 401-500 m227Na.228Na.229Na.230-0.0292310.228*232233234===== PAGE 19 (score 4, numeric-paren 0, table-words 1, var-words 2) =====2352362952371 3238The Size and Spatial Extent of Neighborhood Price Impacts of…239Because the combined effects of levels and trends potentially display distinct 240temporal profiles, we find it convenient to graph the price profiles for standardized 241homes in each distance ring both before and after the infill development; see Fig. 2. 242Note that for infill KDR, one-dwelling and small-scale developments the ‘After last 243infill end, price trend at distance’ is simply a continuation of the ‘After first infill 244start, price trend at distance’ because, as noted above, the intervening period was 245too short to reliably estimate a price trajectory. For moderate- and large-scale devel-246opments the two trend components are identified and graphed separately. Figure 2 247shows level and trend for the five years preceding an infill development, the five 248years following the first infill development, and the five years after completion of the 249last infill development. From the discussion in the "Introduction" and "Residential 250Infill Investment in Existing Neighborhoods: Previous Studies and Our Analytical 251Strategy" section, it is clear that infill development can generate a number of out-252comes depending on type of development and local market context. We therefore 253consider the price level and trend effects separately by type of development.254Geographic Selection of Infill Development255Before turning to the impact results, it is revealing to examine the distinct geo-256graphic selection processes at work for different types of Melbourne infill develop-257ers, as revealed by the “before infill” variables shown in Table 5, panel 1. Across 258each of the infill types, apart from one-dwelling infills, developments are more 259likely to occur within 100 m of somewhat higher-value environments. The ‘before 260infill, level’ coefficients indicates mean sales prices were consistently 1 to 2% 261-0.526202630.526412651.526622672.52681 2 3 4 5 1 2 3 4 5 1 2 3 4 5269Before infill270A er first infill271begins272A ern last infill273ends274KDR, 101-200m275-1.5276-1277-0.52780279128022813282428352841285228632874288528912902291329242935294Before infill295A er first infill296begins297A ern last infill298ends299One dwelling, 101-200m300-0.6301-0.4302-0.230303040.23050.43061 2 3 4 5 1 2 3 4 5 1 2 3 4 5307Before infill308A er first infill309begins310A ern last infill311ends312Small-scale, 101-200m3130314131523163317431813192320332143225323132423253326432753281329233033314 5332Before infill333A er first infill334begins335A ern last infill336ends337KDR, 1-100m338-2339-1.5340-1341-0.53420343134423453346434753481349235033514352535313542355335643575358Before infill359A er first infill360begins361A ern last infill362ends363One dwelling, 1-100m364-0.536503660.536713681.53691 2 3 4 5 1 2 3 4 5 1 2 3 4 5370Before infill371A er first infill372begins373A ern last infill374ends375Small-scale, 1-100m37603770.537813791.538023811 2 3 4 5 1 2 3 4 5 1 2 3 43825383Before infill384A er first infill385begins386A ern last infill387ends388Moderate-scale, 1-100m389-4390-2391039223934394139523963397439853991400240134024403540414052406340744085409Before infill410A er first infill411begins412A ern last infill413ends414Large-scale, 1-100m41504160.541714181.54191 2 3 4 5 1 2 3 4 5 1 2 3 4 5420Before infill421A er first infill422begins423A ern last infill424ends425Moderate-scale, 101-200m42604270.542814291.54301 2 3 4 5 1 2 3 4 5 1 2 3 4 5431Before infill432A er first infill433begins434A ern last infill435ends436Large-scale, 101-200m43704381439244034411 2 3 4 5 1 2 3 4 5 1 2 3 4 5442Before infill443A er first infill444begins445A ern last infill446ends447KDR, 201-300m448-0.8449-0.6450-0.4451-0.245204531 2 3 4 5 1 2 3 4 5 1 2 3 4 5454Before infill455A er first infill456begins457A ern last infill458ends459One dwelling, 201-300m46004610.546214631.546424651 2 3 4 5 1 2 3 4 5 1 2 3 4 5466Before infill467A er first infill468begins469A ern last infill470ends471Moderate-scale, 201-300m472-0.8473-0.6474-0.4475-0.247604770.24781 2 3 4 5 1 2 3 4 5 1 2 3 4 5479Before infill480A er first infill481begins482A ern last infill483ends484Small-scale, 201-300m485-14860487148824891 2 3 4 5 1 2 3 4 5 1 2 3 4 5490Before infill491A er first infill492begins493A ern last infill494ends495Large-scale, 201-300m4960497149824993500450115022503350445055506150725083509451055111512251335144 5515Before infill516A er first infill517begins518A ern last infill519ends520KDR, 301-400m521-1.5522-1523-0.552405250.5526152725283529453055311532253335344535553615372538353945405541Before infill542A er first infill543begins544A ern last infill545ends546One dwelling, 301-400m547-1548-0.8549-0.6550-0.4551-0.255205531 2 3 4 5 1 2 3 4 5 1 2 3 45545555Before infill556A er first infill557begins558A ern last infill559ends560Small-scale, 301-400m561-0.556205630.556415651 2 3 4 5 1 2 3 4 5 1 2 3 45665567Before infill568A er first infill569begins570A ern last infill571ends572Moderate-scale, 301-400m573-0.257405750.25760.45770.65780.857915801 2 3 4 5 1 2 3 4 5 1 2 3 4 5581Before infill582A er first infill583begins584A ern last infill585ends586Large-scale, 301-400m58705880.558915901.559125922.559335941 2 3 4 5 1 2 3 4 5 1 2 3 4 5595Before infill596A er first infill597begins598A ern last infill599ends600KDR, 401-500m601-2602-1.5603-1604-0.560506060.5607160826093610461156121613261436154616561716182619362046215622Before infill623A er first infill624begins625A ern last infill626ends627One dwelling, 401-500m628-1629-0.8630-0.6631-0.4632-0.263306341 2 3 4 5 1 2 3 4 5 1 2 3 4 5635Before infill636A er first infill637begins638A ern last infill639ends640Small-scale, 401-500m64106420.564316441.56451 2 3 4 5 1 2 3 4 5 1 2 3 46465647Before infill648A er first infill649begins650A ern last infill651ends652Moderate-scale, 401-500m653-1654-0.565506560.565716581 2 3 4 5 1 2 3 4 5 1 2 3 4 5659Before infill660A er first infill661begins662A ern last infill663ends664Large-scale, 401-500m665Fig. 2 Home sales price effects of infill development in Melbourne, by distance and development type666