A comparison of residential and commercial real estate values in a polycentric cities

This article aims at identifying emergent secondary centers and measuring their impact on residential and commercial real estate values, through the estimate of hedonic gradients. Urban sprawl combined with the formation of suburban employment centers have produced more complex spatial patterns characterized by polycentric structures. This paper assumes that these changes in urban forms have influenced location choices of both households and firms but have a differentiated impact on two types of urban values: residential and commercial real estate values.We use hedonic regressions to estimate the impact of the polycentric structure of the city on residential and commercial real estate values among other traditional factors. These estimations are completed by semi-parametric regressions in order to analyse sharply the form of the price gradients in a polycentric city. Data on residential and commercial real estate transactions come from PERVAL database recorded by French notary offices. The precise geolocation of transactions used in addition with a rich set of intrinsic characteristics of the buildings allows a sharp estimation of the spatial pattern of real estate prices. It is completed by a rich set of location attributes coming from several data sources recorded at a fine spatial scale and concerning mainly accessibility, socio-economic attributes, local amenities and equipments, distance to the main subcenters. The study is conducted within the Lyon and Bordeaux metropolitan areas in France, allowing a comparison of two different urban patterns and urban sizes. The various scales of the urban polycentrism are explored by taking into account two types of subcenters (by emergence and integration of satellite towns) and by estimating semi-parametric hedonic models. The first contribution of the paper is to analyse sharply two main trends of urban centrality through real estate values: residential centrality and employment centrality. The residential centrality is recomposed by the increasing influence of urban amenities at the expect of employment accessibility. Economic centrality is increasingly differentiated from residential centrality. The second contribution of this paper is to provide a precise estimation of the form of the hedonic gradients for residential and commercial real estate values through the use of semi-parametric regressions.