The Financial Impact of Street-Level Greenery on New York Commercial Buildings

31 Pages Posted: 5 Nov 2020 Last revised: 10 Nov 2020

See all articles by Juncheng Yang

Juncheng Yang

Massachusetts Institute of Technology (MIT) - Center for Real Estate

Helena Rong

Massachusetts Institute of Technology (MIT) - Center for Real Estate

Yuhao Kang

University of Wisconsin - Madison

Fan Zhang

Senseable City Lab

Andrea Chegut

Massachusetts Institute of Technology

Date Written: October 2, 2020

Abstract

Urban street-level greenery is empirically documented to improve mental and physical health, increase productivity, increase urban environmental equality and reduce carbon footprints. In addition, these benefits raise residents' welfare, which has been correlated with increases in residential house prices. We measure street-level greenness in New York City through a novel Green View Index (GVI) using Google Street View images and assess the impacts of greenness on commercial real estate prices. Using a sample of office transactions, we spatially correlate Google Street View Images for New York City over the 2010 to 2017 period. We find a 8.9% to 10.5% statistically, economically and positive transaction premium and a 5.6% to 7.8% rent premium for offices with low to high street-level greenness relative to those building transactions spatially correlated with very low greenness. Estimations are robust to proximity to parks, subway stations, sidewalk widths, household income levels and investments by Building Improvement Districts, as well as other vital and standard office valuation features. By documenting the role of greenery in commercial building valuations, our results give a more complete understanding of the value of greenness in urban environments, and the economic role that urban landscape architecture, planning and development has upon cities.

Keywords: Street Greenery, Google Street View, Hedonic Valuation, Commercial Real Estate

JEL Classification: R33, R39, 033

Suggested Citation

Yang, Juncheng and Rong, Helena and Kang, Yuhao and Zhang, Fan and Chegut, Andrea, The Financial Impact of Street-Level Greenery on New York Commercial Buildings (October 2, 2020). MIT Center for Real Estate Research Paper No. 1, Available at SSRN: https://ssrn.com/abstract=3714858 or http://dx.doi.org/10.2139/ssrn.3714858

Juncheng Yang

Massachusetts Institute of Technology (MIT) - Center for Real Estate ( email )

United States

Helena Rong

Massachusetts Institute of Technology (MIT) - Center for Real Estate ( email )

United States
6073727588 (Phone)

Yuhao Kang

University of Wisconsin - Madison ( email )

716 Langdon Street
Madison, WI 53706-1481
United States

Fan Zhang

Senseable City Lab ( email )

77 Massachusetts Avenue
Cambridge, MA 02139
United States

Andrea Chegut (Contact Author)

Massachusetts Institute of Technology ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

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