Urban quality and real estate market: a hybrid approach based on Multicriteria Analysis and Hedonic Pricing model

The quality of the built environment is a multidimensional notion, as it deals with the land use patterns and mixes, the spatial and temporal distribution of activities, the accessibility to services, the open spaces and green areas, the air quality, the arrangement and appearance of the physical elements of urban design. Although several studies have listed the environmental, social and economic benefits of good urban design for many stakeholders (Cabe, 2001), there is a small body of literature on their monetary value. Most of the scholars focus on the impact of open spaces, urban parks and amenities on residential property values (Anderson and West, 2006), without providing a real monetary estimation of the quality of public goods and services. The present paper focuses on the contribution of urban quality on real estate value. In particular, the Hedonic Pricing Model is used for estimating the marginal price of this variable. Starting from a previous work of the authors in which a multicriteria analytical framework (Keeney and Raiffa, 1976) for calculating an urban quality index has been proposed (Oppio et al., 2018), the research aims at integrating the multidimensional index in a standard hedonic model to estimate the monetary impact of public open spaces' good urban design on the real estate market. Furthermore, the integrated model has been applied on a pilot case study of 200 residential units located in the area of Garibaldi-Repubblica in Milan (Italy). The results of the model are represented using specific thematic value maps that allow the relationships between properties market values and urban quality driving forces to be analysed.