EVALUATION OF VALUE CREATION CONCEPTS IN SINGLE FAMILY RESIDENTIAL SUBDIVISIONS

Abstract

To increase real estate values, developers often apply designs on the land. In the case of a single family housing development, the designs are applied to the unit of subdivisions. In this study, the designs are defined as “value creation concepts,” which increase housing values at the subdivision level. The value creation concepts are classified into five categories – the sense of arrival, product mix, walkability, circulation system, and amenity. This cross-sectional study focuses on exploring the effects of value creation concepts in the subdivision. Two methodologies – the Hedonic Price Model (HPM) and the Hierarchical Linear Model (HLM) – are used to test whether or not the value creation concepts would increase or decrease single family housing values. The study sample is composed of 6,562 single family houses nested in 85 subdivisions in College Station, Texas. Data are composed of two levels: the housing level and the subdivision level. The scores of the sense of arrival were provided by sixtyone graduate students at Texas A&M University using photograph evaluations. Most structural variables were obtained from the Brazos County Appraisal District, and physical environmental variables were objectively measured using the Geographical Information System. In the both models, sense of arrival, greenway connectivity, sidewalk connectivity, and median length of cul-de-sac variables have positive effects on single family housing values while phased project, the number of accessible entrances, street density, single family density, and median length of block variables have negative effects on single family housing values. At the housing level, several structural variables (e.g. bathrooms, attached garage, porches, etc), attached to a golf course, sports facilities, network distance from the nearest elementary school, population density, and personal variables (i.e., tenure, workable age, employment) were significant (p<.05) predictors of single family housing value. Findings support that the value creation concepts have effects on increasing housing values at the subdivision level, which would provide thoughtful insights for developers in residential areas. In addition, the HLM can be used as the complement of the HPM by controlling interaction terms between housing variables and subdivision variables, or among the subdivision variables themselves.