Not In My Neighbor’s Back Yard : External Effects of Density Davidoff, Tom; Pavlov, Andrey; Somerville, Tsur
In Vancouver, as in many "Superstar Cities," low density zoning in residential neighborhooods is both a sacred cow of amenity preservation and a scapegoat for unaffordability. In 2008, the City Council allowed homeowners to build small "laneway homes" behind the main residential structure on qualifying lots in all of the city's single family zones. We exploit this regulatory change to study the externalities that infill housing imposes on neighboring property values. Laneway homes are most commonly built when the main home is substantially rebuilt and generally reduce the size of rear garages. Neighbors who build laneway homes thus add little physical density but impose a household of renters on neighbors. Overall we find a small negative spillover that is not statistically different from zero, suggesting that the negative externalities of population density may be small. We do not find a stronger negative effect in more expensive neighborhoods or on fancier homes, but the negative spillover is statistically different from zero and larger in magnitude on properties with larger lots (-11.2%).
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