Opportunities for Self-Financing Flood Resilience Infrastructures in Boston, Massachusetts
Keywords
Loading...
Authors
Issue Date
2023-09-28
Language
en
Document type
Journal Title
Journal ISSN
Volume Title
Publisher
Title
ISSN
Volume
Issue
Startpage
Endpage
DOI
Abstract
Financing adaptations to climate change in the form of flood resilience infrastructures (FRIs), present financial challenges for local governments (Doeffinger & Rubinyi, 2023). Earlier studies have found that flood risk negatively affects housing prices (Bin & Landry, 2013). By reducing flood risk, housing prices are expected to increase because future damages are (expected to be) avoided (Kim, 2020). This research aims to provide a basis for arguing that FRIs can be (partially) self-financing through land value capture (LVC). If FRI implementation yields increases in sales prices, these increases could be captured to get a return on investments; much like in a virtuous circle (Lord et al., 2019). Through a hedonic price model with a difference-in-differences analysis, the effect of FRI construction is estimated. The model looks at sale transactions, with each sale being linked to its nearest FRI. A distinction is made between pre and post completion sales. The results show that there is a negative relationship between the distance to the nearest completed FRI project and the sale price per sf. On average, FRI projects increased post group sale prices by 2,7%. These findings are in line with earlier accounts (Kelly & Molina, 2023). Based on these results, Boston might consider to start implementing LVC instruments to capture these price increases.
Description
Citation
Supervisor
Faculty
Faculteit der Managementwetenschappen