The Value of Urban Density

Abstract

Urban density is considered a cornerstone of sustainable urban form, enhancing the potential for more sustainable lifestyles and fewer greenhouse gas emissions. 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 indicate that there is 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 based on 1,255 sales transactions from the period 2014 and 2015. The model includes property 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 the Trondheim periphery and the Trondheim centre. With regard to density, the model shows unexpected yet interesting results.