Estimating Homebuyer Preferences Under Intensification: Hedonic Modelling of Open Space and Multimodal Transit Amenities Preceding Light Rail in Kitchener-Waterloo

by Robert Babin

Institution: University of Waterloo
Year: 2016
Keywords: Hedonic Modelling; Spatial Analysis; Urban Planning; Intensification; Light Rail Transit; Land-Use Transport Models; Spatial Econometrics; Homebuyer Preferences
Posted: 02/05/2017
Record ID: 2123533
Full text PDF: http://hdl.handle.net/10012/10936


Intensification is the preeminent growth management approach in Ontario, as well as across much of North America. Under this approach, the Region of Waterloo is currently constructing a light rail transit system and undertaking co-ordinated planning to support population and employment densification alongside other regional goals. The work presented in this thesis is centred on the development of spatially explicit hedonic models to estimate residential preferences for amenities associated with intensification. The results of this work are to be used as willingness-to-pay parameters in an agent-based land use-transport model. The hedonic models presented in this thesis use 26,873 Kitchener-Waterloo residential property sales from 2005 to 2015 to estimate the joint effects of willingness-to-pay and willingness-to-accept for housing. Combined spatial lag and spatial error models are employed to test the effects of environmental home characteristics on assessed and appreciation-adjusted transaction values, for single-detached homes, semi-detached and duplex homes, and townhouses. These models are specified to estimate effects related to the changing built form and housing market under intensification; specifically, this work estimates the price effects associated with access to public and semi-public open space, access to public transit (local bus stops), and walkability throughout the period preceding light rail. A large number of socioeconomic control variables were developed and analyzed to determine an appropriate model specification. Heterogeneous willingness-to-pay estimates are presented for intensification amenities within and outside of the Central Transit Corridor throughout three time periods. Models using assessed values and transaction values provided slightly different but comparable results. Results suggest a positive willingness-to pay effect of walkability for single-detached homes and semi-detached and duplex homes. However, walkability was found to only significantly relate to townhouse value through a synergistic interaction with open space and a negative interactive effect with transit. The regional Central Transit Corridor generally saw greater increases in property value due to walkability and in general throughout the implementation process of regional light rail, compared to homes outside of it. The results of this thesis may be used to help inform policies and investments related to housing, public amenity distribution, and multimodal transit planning. While the precise estimates produced in this work are context-specific, broadly, these results can provide guidance in other municipalities and land-markets similarly undergoing intensification