What are the factors that give a place value?

Little Green Street, Kentish Town, London: probably quite valuable. Image: Getty.

The value of place is simultaneously the most discussed and the least understood of all things. House prices used to be the leitmotiv of a million clichéd dinner parties – no more, I think – but what we mean by the value of an actual neighbourhood and what drives that value is not only little discussed. It has, until recently, barely even been studied.

Create Street’s new report, Beyond Location, tries to answer this question. We have taken advantage of new techniques for analysing values as well as the big data revolution. We have conducted a uniquely wide, data-rich analysis of every 2016 property sale in six English cities (London, Birmingham, Manchester, Leeds, Liverpool and Newcastle).

This has used open datasets to compute basic urban characteristics, such as street network connectivity, population density, amount of greenery, availability of different transport modes. The point of the analysis was not to investigate them separately, but together – and to permit city-wide conclusions and inter-city comparisons.

The findings – part predictable, part surprising – tell us much about the state of our cities. One thing they do show is that urban form really does matter in understanding value. Our models for urban form can predict up to 74 per cent of the official UK poverty index – the Index of Multiple Deprivation – and up to 54 per cent of sales values.

How do specific characteristics affect the value of a London property?

Our key findings include that more greenery is not always a good thing. The immediate presence of attractive greenery or high-quality parks can add huge value in many situations. However, at the city-wide level, the presence of more greenery can be associated with lower as well as higher value. What it is and how it is managed really matters. For example, in London, a home closer than average to a high-quality park costs, on average, 11 per cent (or £51,000) more than one that is not, holding everything else equal. However, in Liverpool, a home located closer than average to a high-quality park is worth, on average, 7 per cent (or £7,760) less. 

Land use and form also matters. We found significant relationships across the six cities between urban form and deprivation and value. Areas of high population and high areas of unbuilt land – for example, high-rise estates with lots of wide-open space – are less valuable and often associated with more deprived communities. This might be partly due to the history of post-war building but, after thirty years of right to buy, most people who can afford to choose continue to avoid this type of urban pattern

Population density and deprivation in London. Click to expand.

The heritage premium is more important than the new build premium. In every city studied, proximity to a listed building was associated with more additional value than the premium associated with a newly built home. A home closer than average to a listed building in London is worth 10.3 per cent (or £49,770) more than one that isn’t, holding everything else equal. The equivalent new build premium is only £8,795.

The findings also highlight a clear difference between London and the other British cities. Accessible income is driving an urban renaissance in London out of all proportion to that visible elsewhere in the UK. Walkable street-based networks or older properties have a value premium over other neighbourhoods which far exceeds that yet visible in other cities. Proximity to a listed building is associated with nearly seven times as much value premium in London as in the other cities studied.

Finally, diversity is valuable. Areas with more diversity of house types suffer from less deprivation. Areas with a more diverse offering of transport and amenities are normally worth more, other things being equal. Above average amenity diversity is associated with additional value in all cities studied.

Property value and connectivity in Newcastle. Click to expand.

Value is a fraught term. Extra value is not always a good thing – certainly not for everyone. In globally successful cities, spiralling house prices are forcing out existing communities. There are ‘sorting effects’, where the better off out-compete the less well-off for the best places.


The ultimate aim of this study therefore is to help developers to build and planners to permit more good places by understanding human preferences more richly.

One thing is for certain though. When it comes to understanding, and predicting, economic and social value, urban form and design really matters.

Alessandro Venerandi is a researcher and urban designer at Create Streets. He has recently completed his doctorate in urban sustainability and resilience at UCL. Beyond Location is available here.

 
 
 
 

What can other cities learn about water shortages from Cape Town’s narrow escape from ‘Day Zero’?

Cape town. Image: Pixabay/creative commons.

Cape Town was set to run dry on 12 April, leaving its 3.7m residents without tap water.

“Day Zero” was narrowly averted through drastic cuts in municipal water consumption and last-minute transfers from the agricultural sector. But the process was painful and inequitable, spurring much controversy.

The city managed to stave off “Day Zero,” but does that mean Cape Town’s water system is resilient?

We think not.

This may well foreshadow trouble beyond Cape Town. Cities across the Northern Hemisphere, including in Canada, are well into another summer season that has already brought record-setting heat, drought and flooding from increased run-off.

Water crises are not just about scarcity

Water scarcity crises are most often a result of mismanagement rather than of absolute declines in physical water supplies.

In Cape Town, lower than average rainfall tipped the scales towards a “crisis,” but the situation was worsened by slow and inadequate governance responses. Setting aside debates around whose responsibility it was to act and when, the bigger issue, in our view, was the persistence of outdated ways of thinking about “uncertainty” in the water system.

As the drought worsened in 2016, the City of Cape Town’s water managers remained confident in the system’s ability to withstand the drought. High-level engineers and managers viewed Cape Town’s water system as uniquely positioned to handle severe drought in part because of the vaunted success of their ongoing Water Demand Management strategies.

They weren’t entirely mistaken — demand management has cut overall daily consumption by 50 per cent since 2016. So what went wrong?


Limits to demand management

First, Cape Town’s approach to water management was not well-equipped to deal with growing uncertainty in rainfall patterns — a key challenge facing cities worldwide. Researchers at the University of Cape Town argued recently that the conventional models long used to forecast supply and demand underestimated the probability of failure in the water system.

Second, Cape Town’s water system neared disaster in part because demand management seemed to have reached its limits. Starting late last year, the city imposed a limit on water consumption of 87 litres per person per day. That ceiling thereafter shrunk to 50 litres per person per day.

Despite these efforts, Cape Town consistently failed to cut demand below the 500m-litre-per-day citywide target needed to ensure that the system would function into the next rainy season.

The mayor accused the city’s residents of wasting water, but her reprimanding rhetoric should not be seen as a sign that the citizens were non-compliant. The continuously shrinking water targets were an untenable long-term management strategy.

Buffers are key to water resilience

In the end, “Day Zero” was avoided primarily by relying on unexpected buffers, including temporary agricultural transfers and the private installation of small-scale, residential grey-water systems and boreholes in the city’s wealthier neighbourhoods. The former increased water supply and the latter lowered demand from the municipal system. These buffers are unlikely to be available next year, however, as the water allocations for the agricultural sector will not be renewed and there is uncertainty in the long-term sustainability of groundwater withdrawals.

For more than a decade, Cape Town has levelled demand, reduced leaks and implemented pressure management and water restrictions. This made Cape Town’s water system highly efficient and therefore less resilient because there were fewer reserves to draw from in times of unusual scarcity.

The UN Water 2015 report found that most cities are not very resilient to water risks. As water managers continue to wait for climate change models to become more certain or more specific, they defer action, paralysing decision-makers.

If we really want our cities to be water-resilient, we must collectively change long-held ideas about water supply and demand. This will require technological and institutional innovation, as well as behavioural change, to create new and more flexible buffers — for example, through water recycling, green infrastructure and other novel measures.

Although Cape Town avoided disaster this year, that does not make it water-resilient. Despite the arrival of the rainy season, Cape Town is still likely to face Day Zero at some point in the future.

The ConversationThere’s a good chance that the city is not alone.

Lucy Rodina, PhD Candidate, University of British Columbia and Kieran M. FindlaterUniversity of British Columbia.

This article was originally published on The Conversation. Read the original article.