THE VALUE OF URBAN DENSITY AN EXPLORATORY OF THE RELATIONSHIP BETWEEN URBAN DENSITY AND HOUSING PRICES IN TRONDHEIM, NORWAY

Urban density is considered a cornerstone of sustainable urban form, enhancing the potential for more sustainable lifestyles and fewer greenhouse gas emissions. Urban densification policies have thus become a pillar of the sustainability planning agenda in Norway. Although this strategy has been contested by some who see denser neighbourhoods as problematic, housing prices seem to contradict this view. This paper proposes the hypothesis that urban density is a well-accepted and valued quality reflected in the willingness-to-pay in the housing market. To explore the relationship between urban density and residential property prices in Trondheim, Norway, this analysis first evaluates 23 distinct urban areas with regard to average square metre price and three density measures - built coverage density, dwelling unit density, and population density. Initial correlation results based on 1,255 sales transactions from 2014 and 2015 indicate a positive relationship between the density measures and price per square metre. To investigate this first observation further, a simple hedonic pricing model was constructed, including characteristics such as property type and age of property; proximity measures, such as distance to the next school or bus stop; and the three density measures. It was run for the complete dataset as well as for the two subsets of Trondheim periphery and Trondheim centre. With regard to density, the model shows unexpected results. It indicates that an increase in dwelling unit density can lead to an increase in price, whereas the opposite can happen for increases in population density. This may be linked to local housing market conditions, such as the rise of high-income single-occupant and dual-income no-kid homes in central locations.