The Impact on Housing Values of Restrictions on Rights of Ownership: The Case of an Occupant's Age

With the exception of anecdotal information, little is known about the specific effects on the value of a house because its ownership is restricted to people older than a certain age. This article provides an empirically-derived assessment of the impact on the selling price of single-family residences when their ownership is age restricted. To determine the effect on the sales price of age-restricted houses, a standard hedonic pricing model is applied to a sample of 371 sales transactions drawn from a suburban area of a large city. The results indicate that an age restriction placed on houses decreases their value by 6%. This finding may be of interest to local land-use regulators, developers who are considering developing age-restricted houses and appraisers who wish to make value adjustments to these homes. Copyright American Real Estate and Urban Economics Association.

The Pricing of the Emergent Leasehold (Possessory) Estates of Ghana

The paper develops hedonic analyses of the pricing of leasehold versus freehold estates in Ghana. The motivation of the paper is the passage of Act 267(5) in 1992 that effectively abolished outright sale of stool lands in Ghana. Stool lands are lands controlled by tribal "chiefs." Act 267(5) prohibits the sale of freehold estates for stool lands. There are two important findings in this study. The first is that freeholds tend to attract premium prices relative to leaseholds. This supports the bundle-of-rights argument. The second is that the effect of the 1992 Act is indeed capitalized into land prices because of the relative increase in the supply of leaseholds vis-à-vis freeholds. Specifically, the price of freeholds increased relative to the price of leaseholds after the constitutional event. The study also finds that transactions involving stools and individuals, usually perceived to be associated with litigation risk (or title insecurity) relative to government lands, are sold at a discount. Transactions noted to have a history of litigation are also associated with price discounts. The estimated coefficients on all the variables representing services to the site like water, electricity and access roads are significantly positive, indicating a high demand for such essential services. Copyright 2004 by the American Real Estate and Urban Economics Association

Hierarchical Zoning, Incompatible Uses and Price Discounts

This study examines an aspect of hierarchical zoning. Hierarchical zoning, unlike mutually exclusive zoning, is uni-directional in that it protects upper-level residential uses from nonconforming, non-residential uses but not "vice versa." The result is that the lower-level zones can be a mixture of several nonconforming, incompatible uses. This unique attribute of hierarchical zoning offers a window of opportunity for choices for affordable housing at affordable locations. Using hedonic analysis, empirical evidence shows that huge price discounts (over 15%) are associated with apartments that are situated in nonconforming zones. Arguments here support more flexible zoning. Copyright American Real Estate and Urban Economics Association.