on the effects of urban natural amenities, architectural quality and accessibility to workplaces on

243 Pages·2015·5 MB·English

HENRIK LÖNNQVIST
ON THE EFFECTS OF URBAN NATURAL AMENITIES,
ARCHITECTURAL QUALITY AND ACCESSIBILITY
TO WORKPLACES ON HOUSING PRICES
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An empirical study on the
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S Helsinki Metropolitan Area
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TIEDUSTELUT PUHELIN
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ON THE EFFECTS OF URBAN NATURAL
AMENITIES, ARCHITECTURAL
QUALITY AND ACCESSIBILITY TO
WORKPLACES ON HOUSING PRICES
An empirical study on the Helsinki
Metropolitan Area
HENRIK LÖNNQVIST
TUTKIMUKSIA
2015:5
UNDERSÖKNINGAR
RESEARCH SERIES
VALOKUVAT
FOTON
PHOTOS
Petri Lindfors, s. 12–13, 25, 79, 158–159
Helsingin kaupungin aineistopankki / Seppo Laakso, s. 60
Helsingin kaupungin aineistopankki / Esko Jämsä, s. 225
Vastavalo.fi / Aarno Isomäki, s. 198–199
Raimo Riski, s. 119
Visit Helsinki / Sakke Somerma, etukansi | pärm | Cover
Petri Lindfors, takakansi | bakpärm | Back cover
Tarja Sundström-Alku, takakansi | bakpärm | Back cover
KUVIOT
FIGURER
GRAPHS
Pirjo Lindfors
Janne Pihlajaniemi, Emma Koivuranta, 5.1.-5.6.
Faris Alsuhail, 6.7, 6.8
TAITTO
OMBRYTNING
GENERAL LAYOUT
Pirjo Lindfors
KANSI
PÄRM
COVER
Tarja Sundström-Alku
PAINO
TRYCKERI
PRINT
Edita Prima Oy, Helsinki 2015
PAINETTU
ISSN 1455-724X
ISBN 978-952-331-017-9
VERKOSSA
ISSN 1796-7228
ISBN 978-952-331-018-6
A doctoral dissertation for the degree of Doctor of Science in Technology to be presented
with due permission of the Aalto University School of Engineering for public examination
and debate in Auditorium R2 at Aalto University (Rakentajanaukio 4A, Espoo, Finland)
on the 18th of December 2015 at 12 noon.
Supervising professor
Professor Kauko Viitanen, Department of Real Estate, Planning and Geoinformatics,
Aalto University School of Engineering, Espoo, Finland
Thesis advisor
Professor Heikki A. Loikkanen, Department of Economics, University of Helsinki, Finland
Preliminary examiners
Professor Hans Lind
KTH Royal Institute of Technology, Stockholm, Sweden
Professor Martin Haran
School of the Built Environment, Ulster University, Belfast, UK
Opponent
Docent Elias Oikarinen, Department of Economics, University of Turku, Finland
CONTENTS
Acknowledgements ............................................................................................................6
Foreword ..............................................................................................................................8
Esipuhe .................................................................................................................................9
Author’s contribution to the chapters ............................................................................10
Abbreviations .....................................................................................................................11
1 Introduction ...................................................................................................................14
1.1 Motivation .............................................................................................................14
1.2 Study area ............................................................................................................15
1.3 Orientation .............................................................................................................18
1.4 Research aim and research questions ...............................................................21
1.5 Detailed structure of the study ...........................................................................22
2 Theories of urban housing markets ...........................................................................26
2.1 Perspectives on housing and urban housing markets ...................................26
2.2 The household’s choice of housing quality ......................................................31
2.3 Monocentric model and beyond ......................................................................32
2.3.1 Housing consumption and household location choice
in urban areas ............................................................................................33
2.3.2 Urban land use in the monocentric model ............................................36
2.3.3 Empirical testing of the monocentric model .........................................38
2.3.4 From a monocentric to a polycentric city ...............................................40
2.4 Public goods, externalities and amenities ........................................................44
2.4.1 Local public goods and capitalisation hypothesis ................................44
2.4.2 Externalities and housing prices .............................................................47
2.4.3 Local public goods in the monocentric model ......................................50
2.4.4 Different types of amenities .....................................................................52
2.4.5 Amenities and intercity sorting ................................................................52
2.5 Accessibility-related perspectives to the monocentric model .......................53
2.5.1 Family structure and non-work travel .....................................................54
2.5.2 Traffic network and congestion ................................................................55
2.5.3 Wasteful commuting debate ....................................................................56
HENRIK LÖNNQVIST 3
2.5.4 Uncertainty, expectations and search ....................................................57
2.5.5 Accessibility and urban spatial configuration........................................58
3 Research methods ........................................................................................................62
3.1 Different approaches to economic valuation in housing market context ....62
3.2 Hedonic method ...................................................................................................63
3.3 Defining urban housing submarkets ................................................................68
3.3.1 Different approaches to housing submarkets .......................................68
3.3.2 Submarkets and hedonic prices ..............................................................69
3.3.3 Submarket – an elusive concept .............................................................71
3.4 Empirical implementation of the hedonic model .........................................72
3.4.1 Assumptions of the ordinary least squares model ...............................72
3.4.2 Modelling submarkets ..............................................................................76
4 Urban natural amenities and housing prices............................................................80
4.1 Introduction ...........................................................................................................80
4.2 Related literature ..................................................................................................81
4.3 Methods ................................................................................................................83
4.4 Study area and data ............................................................................................84
4.5 Results ...................................................................................................................87
4.5.1 Descriptive statistics .................................................................................87
4.5.2 OLS models ................................................................................................92
4.5.3 Structural stability of OLS models ........................................................100
4.5.4 Alternative land use variables ................................................................101
4.5.5 Mixed models ............................................................................................110
4.6 Discussion ...........................................................................................................116
5 Architectural quality and housing prices .................................................................120
5.1 Introduction .........................................................................................................120
5.2 Architectural quality and housing markets ....................................................121
5.3 Related literature ................................................................................................123
5.4 Data and method ...............................................................................................126
5.4.1 Study area .................................................................................................126
5.4.2 Data and variables ...................................................................................127
5.4.3 Hedonic method and estimation issues ...............................................134
5.5 Results .................................................................................................................135
5.5.1 Descriptive statistics ...............................................................................135
5.5.2 Price models .............................................................................................138
4 HENRIK LÖNNQVIST
5.6 Discussion ...........................................................................................................155
6 Accessibility, gravitational potential and housing prices ......................................160
6.1 Introduction .........................................................................................................160
6.2 What is accessibility? .........................................................................................161
6.2.1 Defining accessibility...............................................................................161
6.2.2 Criteria for accessibility measures ........................................................162
6.2.3 Different types of accessibility measures .............................................163
6.3 Development of urban spatial structure in the Helsinki Region .................165
6.4 Related literature ................................................................................................170
6.5 Method and data ................................................................................................175
6.5.1 Study area and data ................................................................................175
6.5.2 Accessibility variables .............................................................................176
6.5.3 Control variables ......................................................................................177
6.6 Results .................................................................................................................179
6.6.1 Descriptive statistics ................................................................................179
6.6.2 Price models .............................................................................................183
6.7 Discussion ...........................................................................................................196
7 Conclusions ..................................................................................................................200
7.1 Results of this study ...........................................................................................200
7.2 Contributions of the study .................................................................................201
7.3 Evaluation of the study ......................................................................................203
7.3.1 Method and data ......................................................................................203
7.3.2 External validity ........................................................................................204
7.4 Methodological development and future research .......................................205
Abstract ............................................................................................................................207
References ........................................................................................................................208
Appendix A .....................................................................................................................226
Appendix B .....................................................................................................................227
Appendix C .....................................................................................................................228
Appendix D .....................................................................................................................230
Appendix E .....................................................................................................................234
HENRIK LÖNNQVIST 5
ACKNOWLEDGEMENTS
If we all chose a career based solely on our mirable as the finalisation of this thesis has
childhood dream jobs, I would have grown dragged on almost indefinitely. The silver
up to be an architect. It became clear rel- lining is that this delay has presented me
atively early that I had the desire but not several opportunities to have fascinating
the talent to match. Before long, howev- discussions with Kauko on a number of
er, I found another path to follow, and a questions related to urban development
good one at that: economics. Around the and real estate economics. I deeply value
time when I was looking for a subject for our conversations. During my postgrad-
my master’s thesis I bumped into an in- uate studies I have also had the chance
teresting (and, in Finland, relatively little to acquaint myself more thoroughly with
studied) branch of the discipline: urban Real Estate Economics and see the re-
economics. On hearing about my choice of search field of this discipline, including in
thesis topic, Professor Markku Ollikainen, Asia, which has been for me an extremely
the supervisor of my thesis seminar at Hel- useful and interesting experience.
sinki University, instructed me to turn to The pre-examiners of my dissertation,
Professor Heikki A Loikkanen. As it turned Professor Hans Lind and Professor Martin
out, Heikki would act as one of the exam- Haran, have given me a plethora of good
iners for my thesis work and would later advice and the corrections they suggested
become one of the supervisors for my doc- have improved my dissertation immense-
toral dissertation. His support to my efforts ly. I want to express my sincere thanks for
has been invaluable and he has headed a their contribution.
series of Academy of Finland-funded re- My dissertation is based on collabora-
search projects which have played a part tion with a number of researchers from
in making possible this dissertation work. various disciplines. Professor Liisa Tyrväi-
Research projects led by Heikki have al- nen, together with her research group, has
ways combined societal relevance and dif- made possible the section on urban nat-
ferent research approaches in interesting ural amenities in this work. As much as I
ways. In the course of these projects, I have am a nature lover, I would not have been
also had the opportunity to receive valua- able to ‘see the forest for the trees’ with-
ble feedback for my work. My particular out Liisa and her team. Luckily, my path
thanks go to Dr Essi Eerola, Dr Teemu Lyy- crossed again with architecture at the time
tikäinen and Dr Tuukka Saarimaa. of writing this dissertation when I met the
As I began my postgraduate studies architect Janne Pihlajaniemi. Later, when
in Real Estate Economics at the Helsinki we celebrated Janne’s PhD defence af-
University of Technology, currently Aalto terparty in December 2014, I was able to
University, Professor Kauko Viitanen was thank him for having had the opportunity
appointed supervisor of my dissertation to take a peek in the world of architecture.
work. His endless patience has been ad- I now repeat those thanks to Professor
6 HENRIK LÖNNQVIST
Pihlajaniemi. The third essential collab- Vass for the language revision which un-
oration partner for this dissertation work doubtedly makes this work a more pleas-
has been Professor Tuuli Toivonen and her ant reading experience.
MetropAccess research group. Their pio- Further thanks go to Professor Mari
neering work with accessibility calculation Vaattovaara who has been my partner in a
models has been immensely useful for me. number of collaborative projects over the
Finally I would like to extend my heartfelt years. She has always been happy to talk
thanks to Dr Seppo Laakso for fruitful co- and never short of time when there has
operation over many years. This coopera- been a need to discuss work issues or other
tion has benefited my dissertation project small or big things in life. Of utmost impor-
to a very significant degree. tance are also the frequent conversations
During the entire length of this process, I have had over many years with my long
I have worked at City of Helsinki Urban time colleague Martti Tuominen and Pro-
Facts. Besides this dissertation, my years fessor Matti Kortteinen. Besides work-re-
at this department have been filled with lated and academic questions, these talks
extremely interesting research projects in have often touched the deeper stuff of life.
the field of Urban Studies. The work com- To my cousin Rauno Koskinen I offer warm
munity has always been inspiring and the thanks for his support and the numerous
work conditions have been outstanding. constructive discussions we have had over
My warm thanks go to all my colleagues both of our doctoral dissertation projects
and especially Director Timo Cantell and and life in a much wider sense. We have
his predecessor Asta Manninen. A spe- worked towards our respective goals in
cial thanks to Statistics and Information unison: our doctoral defences will be held
Services Manager Ari Jaakola with whom only a month apart.
I carried out a research project that had a Finally I wish to thank my most loved
significant impact on the orientation of my ones, my family and my nearest. They have
dissertation work. I am indebted to Ari also had to endure a lot during this long project.
for many important conversations over the First of all I want to thank my wife Ursu-
years on topics related both to work and to la. Not only have you led us through one
private life. My further thanks to research- house construction project, you have also
ers Jenni Väliniemi-Laurson and Faris borne much of the responsibility for our
Alsuhail whose contribution in modifying family’s everyday life in the past few years.
the research data has been very valuable. Together with our sons Oskar and Topias,
The expertise and hard work of Pirjo Lind- you have always found the energy to sup-
fors and Tarja Sundström-Alku in editing port me. I cannot express how lucky and
this dissertation for print deserves a bow grateful I am to have you all in my life.
of gratitude. I am also grateful to Teemu
Helsinki, 18 November 2015

Henrik Lönnqvist
HENRIK LÖNNQVIST 7