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Not in my neighbour’s back yard? Laneway homes and neighbours’ property values

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  • Davidoff, Thomas
  • Pavlov, Andrey
  • Somerville, Tsur

Abstract

Single-family zoning is often defended as necessary to preserve neighbourhood amenities, but it is also blamed for making housing less affordable by constraining supply. In 2009, the City of Vancouver rezoned 95% of single-family areas to allow small accessory dwelling units (ADUs) or “laneway homes” behind residential structures. The goal was to increase rental housing supply with minimal disruption to rezoned neighbourhoods. We exploit this regulatory change to estimate the magnitude of externalities onto nearby units from increases in density. We find that even this “gentle” densification negatively affects neighbouring properties. This negative spillover is strongest for higher-valued properties and non-existent for median and lower-valued homes. Our findings illustrate that the costs and benefits of added density depend importantly on neighbourhood type.

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  • Davidoff, Thomas & Pavlov, Andrey & Somerville, Tsur, 2022. "Not in my neighbour’s back yard? Laneway homes and neighbours’ property values," Journal of Urban Economics, Elsevier, vol. 128(C).
    • Handle: RePEc:eee:juecon:v:128:y:2022:i:c:s0094119021000875
    DOI: 10.1016/j.jue.2021.103405
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    Cited by:

    1. Dobbels, Gregory & Tavakalov, Suren, 2024. "Not in My Back Yard: The Local Political Economy of Residential Land-Use Regulations," MPRA Paper 122679, University Library of Munich, Germany.
    2. Nathaniel Harris & Chuanhao Lin, 2024. "Planning Regulations: Two Tests to Determine if We Have Confused the Cure With the Disease," Working Papers 2024-02, The George Washington University, Institute for International Economic Policy.
    3. Harris, Nathaniel, 2024. "Measuring aggregate land values using individual city land value gradients," Regional Science and Urban Economics, Elsevier, vol. 106(C).
    4. Jan K. Brueckner & Sarah Thomaz, 2024. "ADUs in Los Angeles: Where are they located and by how much do they raise property value?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 52(3), pages 885-907, May.
    5. Lin, Chuanhao, 2024. "Do households value lower density: Theory, evidence, and implications from Washington, DC," Regional Science and Urban Economics, Elsevier, vol. 108(C).
    6. Anthony Yezer, 2024. "Planning Regulations: Does Land Use Regulation Lower the Average Price of Housing in Cities?," Working Papers 2024-03, The George Washington University, Institute for International Economic Policy.
    7. Fang, Limin & Stewart, Nathan & Tyndall, Justin, 2023. "Homeowner politics and housing supply," Journal of Urban Economics, Elsevier, vol. 138(C).

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