1# RECORD cb483fb0d918a1319e85e2a75c1ed330c7c675822# TITLE: The effect of land subsidence on real estate values3# YEAR: 2020.0 VENUE: nan DOI: 10.5194/piahs-382-703-20204# AUTHORS: W. Willemsen; S. Kok; O. Kuik5# PAGES: 5 CANDIDATE TABLE PAGES (1-based): []6# ABSTRACT: Abstract. Land subsidence in the Netherlands, mainly occurring in its western and7northern peat and clay soils, causes significant damage to houses and8infrastructure, estimated at EUR 17 billion until 2050, through differential settlement of shallow foundations, negative skin friction and9fungal decay of timber piles. Various studies and reports both in The10Netherlands and abroad have addressed the potential economic impacts of11subsidence on houses: yet, these studies lack spatially detailed data and12instead rely on generic assumptions on expected damage restoration costs. By using a hedonic pricing model, this study examines the impact of subsidence on housing prices in the Dutch cities of Rotterdam and Gouda. In contrast to earlier studies, subsidence and its impact on property values are examined at house level. We test for the effect of subsidence with data related to (i) general (uniform) subsidence (mm yr −1 ), (ii) differential subsidence of a building and (iii) subsidence of the surrounding area in relation to the house. Results show that uniform subsidence has the largest impact on property values with approximately −6 %, while “differential” and “surrounding” subsidence show respectively −2 % and no effect. These results could prove useful to policymakers, homeowners and housing corporations by generating a better understanding of the impact of subsidence on property values and subsequently to create awareness and spur investments in measures to mitigate damage. It should be noted that these results are specific to the research area are therefore not immediately scalable to other cities as local conditions differ.131415===== PAGE 1 (score 4, numeric-paren 0, table-words 0, var-words 4) =====1617Proc. IAHS, 382, 703–707, 202018https://doi.org/10.5194/piahs-382-703-202019© Author(s) 2020. This work is distributed under20the Creative Commons Attribution 4.0 License.21Open Access22Tenth International Symposium on Land Subsidence (TISOLS)23The effect of land subsidence on real estate values24Wouter Willemsen1, Sien Kok1, and Onno Kuik2251Deltares, 2629 HV Delft, the Netherlands262Vrije Universiteit Amsterdam, 1081 HV Amsterdam, the Netherlands27Correspondence: Wouter Willemsen (willemsenwouter@gmail.com)28Published: 22 April 202029Abstract. Land subsidence in the Netherlands, mainly occurring in its western and northern peat and clay soils,30causes significant damage to houses and infrastructure, estimated at EUR 17 billion until 2050, through differ-31ential settlement of shallow foundations, negative skin friction and fungal decay of timber piles. Various studies32and reports both in The Netherlands and abroad have addressed the potential economic impacts of subsidence33on houses: yet, these studies lack spatially detailed data and instead rely on generic assumptions on expected34damage restoration costs. By using a hedonic pricing model, this study examines the impact of subsidence on35housing prices in the Dutch cities of Rotterdam and Gouda. In contrast to earlier studies, subsidence and its36impact on property values are examined at house level. We test for the effect of subsidence with data related37to (i) general (uniform) subsidence (mm yr−1), (ii) differential subsidence of a building and (iii) subsidence of38the surrounding area in relation to the house. Results show that uniform subsidence has the largest impact on39property values with approximately −6 %, while “differential” and “surrounding” subsidence show respectively40−2 % and no effect. These results could prove useful to policymakers, homeowners and housing corporations41by generating a better understanding of the impact of subsidence on property values and subsequently to create42awareness and spur investments in measures to mitigate damage. It should be noted that these results are specific43to the research area are therefore not immediately scalable to other cities as local conditions differ.44145Introduction46Land subsidence is a substantial problem affecting many47cities worldwide. It potentially causes damage to houses,48businesses, agriculture and public infrastructure (Reddish49and Whittaker, 2012). These consequences are observed in50the Netherlands, which is prone to land subsidence due to ar-51tificial drainage of clay and peat soils, which leads to clay52settlement and peat oxidation (Nieuwenhuis and Schokking,531997; Schothorst, 1977). Especially in urban areas subsi-54dence rates can vary over space due to a heterogeneous sub-55surface and loading by man-made structures such as build-56ings and infrastructure (Zeitoun and Wakshal, 2013). Sub-57sidence in the Netherlands is estimated to cause around58EUR 20 billion in damage up until 2050, of which at least59EUR 17 billion in expected repair costs of structural dam-60age – e.g. restoring foundations, cracked walls, sloping floors61– to buildings (Van den Born et al., 2016). This restoration62costs approach does not fully represent socio-economic im-63pact, as individual preferences such as risk aversion are not64accounted for.651.166Valuing subsidence risk in housing market67An approach that better reflects such individual preferences68is the revealed preference approach “hedonic pricing”, as69e.g. used by Yoo and Perring (2017) to assess the effect70of subsidence on house transactions in Phoenix, Arizona,71and to assess the impact of earthquake risks in Groningen72(Koster and Van Ommeren, 2015). This method takes all as-73pects which influence a buyer’s decision into account by us-74ing the actual transaction prices. Yoo and Perring (2017) find75that houses located in a subsiding area were valued 9.9 %76less on average. This study evaluates subsidence on a large77scale – local subsidence patterns and differences in founda-78tion are not included. In the Dutch housing market, aware-79ness of real estate damage due to subsidence has recently80increased, among other things due to the spike in damage re-81Published by Copernicus Publications on behalf of the International Association of Hydrological Sciences.82