Price and distributional effects of privately provided open space in urban areas

In recent decades, there has been a noticeable increase in land conservation by the non-governmental sector, supplementing governmental efforts to preserve open spaces and landscapes at the urban-rural fringe. This trend should, according to a prominent urban economics model, have significant effects on urban real estate markets. The effects will vary along the income and home ownership distribution. The model is followed by an empirical investigation of the theoretical predictions using a rich data-set from the counties in the San Francisco Bay Area. The hedonic regressions show that private land conservation has a significant effect on housing prices, but this effect varies between areas with different housing tenure shares. An increase in the share of home renters in a neighbourhood diminishes the effect of land conservation on housing prices, confirming the predictions of the model. The results provide evidence in favour of spatially explicit policies to support conservation efforts.