Bourassa, S.C., Hoesli, M., Mayer, M. and Stalder, N. (2025), “Reflections on hedonic price modeling”, Journal of European Real Estate Research, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JERER-11-2024-0087
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Abstract
Purpose
This paper provides a critical history of residential hedonic price modeling, highlighting key issues and advances. It is based on the keynote address presented by the first author at the European Real Estate Society Annual Conference in Sopot (Gdańsk), Poland, in June 2024.
Design/methodology/approach
The core of the paper is a high-level review of the methodological literature, focusing on three issues: model specification, multicollinearity and functional form. This review is framed by an early example of hedonic price modeling and a current application. These examples demonstrate key issues and advances in hedonic price modeling.
Findings
Hedonic price research has expanded dramatically with the advent of personal computing. Increased availability of data has enabled better model specification. At the same time, the development of interpretable machine learning techniques has allowed much more flexible modeling of functional form. However, multicollinearity continues to be, by definition, an intractable problem.
Originality/value
This paper presents a review of residential hedonic price modeling intended to provide researchers with a useful high-level perspective on the topic. A case study of Gdańsk illustrates an approach to producing interpretable results from machine learning estimations.
Keywords
Hedonic modeling; house prices; specification issues; multicollinearity; functional form; interpretable machine learning; R31
Osterhage, D. R., Acolin, J., Fishman, P. A., & Dannenberg, A. L. (2024). Economic impact on local businesses of road safety improvements in Seattle: implications for Vision Zero projects. Injury Prevention, 30(6), 468–473. https://doi.org/10.1136/ip-2023-044934.
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Abstract
Background Local transportation agencies implementing Vision Zero road safety improvement projects often face opposition from business owners concerned about the potential negative impact on their sales. Few studies have documented the economic impact of these projects.
Methods We examined baseline and up to 3 years of postimprovement taxable sales data for retail, food and service-based businesses adjacent to seven road safety projects begun between 2006 and 2014 in Seattle. We used hierarchical linear models to test whether the change in annual taxable sales differed between the 7 intervention sites and 18 nearby matched comparison sites that had no road safety improvements within the study time frame.
Results Average annual taxable sales at baseline were comparable at the 7 intervention sites (US$44.7 million) and the 18 comparison sites (US$56.8 million). Regression analysis suggests that each additional year following baseline was associated with US$1.20 million more in taxable sales among intervention sites and US$1.14 million more among comparison sites. This difference is not statistically significant (p=0.64). Sensitivity analyses including a random slope, using a generalised linear model and an analysis of variance did not change conclusions.
Discussion Results suggest that road safety improvement projects such as those in Vision Zero plans are not associated with adverse economic impacts on adjacent businesses. The absence of negative economic impacts associated with pedestrian and bicycle road safety projects should reassure local business owners and may encourage them to work with transportation agencies to implement Vision Zero road safety projects designed to eliminate traffic-related injuries.
Ruoniu (Vince) Wang, Wei Kang, Xinyu Fu, Do inclusionary zoning policies affect local housing markets? An empirical study in the United States, Cities, Volume 158, 2025, 105736, ISSN 0264-2751, https://doi.org/10.1016/j.cities.2025.105736.
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Abstract
In the face of a housing affordability crisis, many cities have adopted inclusionary zoning (IZ) policies to increase the supply of affordable housing. Yet, IZ remains a controversial local policy due to its varied and inconclusive effects on housing market outcomes. This study investigates this debate by adopting a quasi-experimental design with a national dataset of IZ policies in the United States. We find that, on average, IZ policies did not affect municipality-wide housing permits or rents. However, the implementation of IZ resulted in an average of 2.1 % increase in home prices. Our results also underscore the connection between IZ policy design and market outcomes: more stringent IZ policies (i.e., those that are mandatory and apply to the entire jurisdiction) led to a higher impact on home prices while mitigating the rent effect. Additionally, IZ's market effects varied based on market conditions and the time elapsed since policy adoption. We discuss these findings in terms of implications for policy design and planning practice.
Keywords
Inclusionary zoning; Housing market outcome; Policy effect; United States; Staggered Difference-in-Differences
Debrah, C., Chan, A. P. C., Darko, A., Owusu-Manu, D.-G., & Ohene, E. (2024). Green Finance. In Rethinking Pathways to a Sustainable Built Environment (pp. 277–302). Routledge. https://doi.org/10.1201/9781003317890-18
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Abstract
Green building is an “unheralded hero” in the global emissions fight. Its business case has raised demand from several stakeholders. It is seen as a multitrillion-dollar business opportunity of the next decade, leading to increased green finance (GF) investment for green building. GF is accepted as a tool to finance climate change mitigation and adaptation actions, including buildings and construction. To promote GF for green building, collaboration efforts between governments, businesses, investors, and the public are key. This chapter presents the evolution of GF for green building, an overview of the implementation and its potentials, with a focus on the role of stakeholders, policies, regulations, and incentives. Typologies of GF for green building and some examples of success stories are discussed. Other related issues such as green standards, green certifications, and green indices are examined. This chapter facilitates a systematic and comprehensive understanding of the subject. Overall, it summarises the development of GF in this field and the consequent impact on climate action.
Professor Steve Bourassa of the Washington Center for Real Estate Research (WCRER) and Runstad Department of Real Estate was quoted in a story entitled “Listings are up, interest rates may come down.” Read the full article here.
Associate Professor Gregg Colburn in the Runstad Department of Real Estate was cited in the Council of Economic Advisors 2024 Economic Report of the President. Chapter 4 of the report, “Increasing the Supply of Affordable Housing: Economic Insights and Federal Policy Solutions” cites a book from Aldren and Colburn, 2022, entitled “Homelessness Is a Housing Problem: How Structural Factors Explain U.S. Patterns.” (Available here: https:// homelessnesshousingproblem.com/.) Read the report, and see the book from Aldren and Colburn for more information.
Colburn, G., Hess, C., Allen, R., & Crowder, K. (2024). The dynamics of housing cost burden among renters in the United States. Journal of Urban Affairs, 1–20. https://doi.org/10.1080/07352166.2023.2288587.
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Abstract
Housing cost burden—defined as paying more than 30% of household income for housing—has become a central feature of the American stratification system with dire consequences for the health and well-being of adults and children living in burdened households. To date, existing research has largely focused on the overall prevalence and distribution of housing cost burden—that is, the percentage of households that are cost burdened at a given time and differences in exposure to housing cost burden based on race and income using cross-sectional sources of data. To more fully understand the dynamics of housing cost burden among renter households in the United States including the frequency and duration of spells, we use 50 years of longitudinal data from the Panel Study of Income Dynamics (PSID). The analysis reveals that, in contrast to the episodic nature of poverty, housing cost burden is deep, frequent, and persistent for a growing share of American households.
Keywords
Housing cost burden; rental housing; housing affordability; rent burden
Associate Dean for Research and P.D. Koon Professor of Construction Management Carrie Sturts Dossick was interviewed and featured in a NPR Freakonomics Radio episode entitled “566. Why Is It So Hard (and Expensive) to Build Anything in America?” View the College of Built Environments LinkedIn post about this podcast feature. Episode description: “Most industries have become more productive over time. But not construction! We identify the causes — and possible solutions. (Can you say … “prefab”?) RESOURCES: “The Strange and…
Sun, F., Whittington, J., Ning, S., Proksch, G., Shen, Q., & Dermisi, S. (2023). Economic resilience during COVID-19: the case of food retail businesses in Seattle, Washington. Frontiers in Built Environment, 9. https://doi.org/10.3389/fbuil.2023.1212244
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Abstract
The first year of COVID-19 tested the economic resilience of cities, calling into question the viability of density and the essential nature of certain types of services. This study examines built environment and socio-economic factors associated with the closure of customer-facing food businesses across urban areas of Seattle, Washington. The study covers 16 neighborhoods (44 census block groups), with two field audits of businesses included in cross-sectional studies conducted during the peak periods of the pandemic in 2020. Variables describing businesses and their built environments were selected and classified using regression tree methods, with relationships to business continuity estimated in a binomial regression model, using business type and neighborhood socio-demographic characteristics as controlled covariates. Results show that the economic impact of the pandemic was not evenly distributed across the built environment. Compared to grocery stores, the odds of a restaurant staying open during May and June were 24%, only improving 10% by the end of 2020. Density played a role in business closure, though this role differed over time. In May and June, food retail businesses were 82% less likely to remain open if located within a quarter-mile radius of the office-rich areas of the city, where pre-pandemic job density was greater than 95 per acre. In November and December, food retail businesses were 66% less likely to remain open if located in areas of residential density greater than 23.6 persons per acre. In contrast, median household income and percentage of non-Asian persons of color were positively and significantly associated with business continuity. Altogether, these findings provide more detailed and accurate profiles of food retail businesses and a more complete impression of the spatial heterogeneity of urban economic resilience during the pandemic, with implications for future urban planning and real estate development in the post-pandemic era.
Steven Bourassa is an H. Jon and Judith M. Runstad Endowed Professor and Chair in the Runstad Department of Real Estate, and is Director of the Washington Center for Real Estate Research. Professor Bourassa was quoted in a Washington State Standard story entitled “Rents in Washington show signs of stabilizing,” as an expert in the field. Read the article here.