Does Urban Design Influence Property Values in High-Poverty Urban Neighborhoods?

The nationwide real estate boom of the 1990s brought new housing development to many formerly distressed urban neighborhoods. Our study investigates the relationship between the urban design and the value of new housing in order to determine whether or not urban design is a significant contributor to housing value in these places. We distinguish between three urban design types (enclave, traditional neighborhood development [TND], and infill) and perform a hedonic regression on the assessed values of development constructed in distressed Chicago neighborhoods between 1993 and 2003. Our findings demonstrate that urban design is a significant contributor to value. Infill-type housing is the most highly valued, and there are clear penalties for enclave- and TND-type housing. We conclude that residents of new urban housing value its close connection to its surrounding neighborhood context, and do not prefer housing dissociated or isolated from its context. We also examine the value contributions of individual urban design features and find that residents value some urban design features characteristic of enclave-type and others characteristic of TND-type development.