The relationship between land consolidation and neighboring housing prices – application of quantile regression

Purpose This study aims to use the hedonic price method to explore the relationship between land consolidation and neighboring housing prices. Design/methodology/approach Beginning in the 1980s, with the goal of expediting the city’s development, the Kaohsiung City Government began the expropriation of two zones covering the Kaohsiung Museum of Fine Arts and the Aozihdi Park areas in the Gushan District, which are termed the 44th (KMFA) Redevelopment Zone and the Nong-16 Zone, respectively. Land consolidation and zone expropriation are both, in essence, policy measures to promote appropriate land use. Both measures provide for land-use zoning and planning of parks and green spaces and are key determinants of housing prices within these zones. This study uses the hedonic price method to explore the relationship between land consolidation and neighboring housing prices. Findings The ordinary least squares estimation results indicate that housing prices decrease by 0.1% for every additional meter in the distance to the KMFA or Nong-16 zones. The mean housing price in the KMFA zone is 0.2% higher than that in the Nong-16 zone. The quantile regression results show no significant differences in the relationship between the distance to the KMFA or Nong-16 zones and the price distributions for the high-, medium- and low-price housing markets. As the housing-price level increases, the difference in prices between the KMFA or Nong-16 zones and typical zones gradually diminishes. Additionally, as the price level increases, there is an increase in the difference in the distribution of high housing prices between the KMFA and Nong-16 zones. Practical implications Overall, the findings suggest that land consolidation improves residents’ living environments and increases neighboring housing prices. These results provide valuable insights for government agencies when evaluating the benefits and investment returns of urban renewal, land development and zone expropriation policies. They also support the planning of public infrastructure and recreational spaces. Originality/value Unlike previous studies that predominantly examined the impacts of land use control on housing prices (see Hannah, Kim and Mills, 1993; Pollakowski and Wachter, 1990; Ihlanfeldt, 2007; and Bramley, 1993), this study focused on the seldom-discussed topic of land consolidation.