The value of public space

Many scien­tific studies have proven that high-quality public spaces are of great impor­tance to society and ecology. They contribute signif­i­cantly to the quality of life in cities and are a reflection of urban identity. In their simplest form, they are places that are freely acces­sible to all, that can be used collec­tively without being forced to consume, and where public life takes place. The empirical study mentioned below analyzes the economic added value of public space. Are residents willing to pay higher rents for apart­ments close to attractive public spaces? Well-founded answers to this question have great signif­i­cance because a better under­standing of the economic added value of public spaces allows for more targeted invest­ments. Further, it enables a more conscious devel­opment of public spaces.

A strong willingness to pay for high-quality public space

A new empirical study has demon­strated that high-quality public space also impacts economic efficiency. The analysis shows a signif­icant positive corre­lation between the existence of a public recre­ation space near rental housing and the corre­sponding rents paid for those units. Moreover, the higher the price difference, the better the quality of the public space. The effect is greatest in large cities: Here, proximity to parks, squares, and other well-rated recre­ational spaces can increase willingness to pay by up to 12 percent in comparison to similar apart­ments that do not have any attractive public space nearby. The effect decreases in cities that are smaller. This is not surprising since recre­ational spaces are usually available there in large numbers and can be easily reached.

Broader consid­er­ation of the generated added values is needed

The quality of public space has direct conse­quences on its surroundings. However, little attention is still paid to this context when analyzing the profitability of real estate valua­tions. Invest­ments in public space are only reflected on the cost side and can therefore only be justified strate­gi­cally to a limited extent. With better integration of public-space-generated values into the profitability analysis of real estate, these invest­ments can be made more plausible and subse­quently used strate­gi­cally.

Outlook — putting the next pieces of the puzzle together

The results of the study can be seen as the first piece of the puzzle, to which others must be added. The study indicates the high value of public space that people are willing to pay more for. In its conclusion, further questions are raised. For example, do people also stay longer in apart­ments close to high-quality public space, or is there more frequent tenant turnover due to the resulting increased activity and associated noise? What impact does a high-quality space have on offices, which are increas­ingly trans­forming from workspaces to living spaces, as exemplified by Google Neigh­bor­hoods? How much do retail spaces benefit from high-quality public space?

Further analysis can help to better quantify the value of public space. In order to collect the relevant data and infor­mation for this purpose, various survey methods are possible (e.g. inter­views, obser­va­tions, modeling, etc.). The focus is on the still scarcely available data regarding how public spaces in large Swiss cities are quali­ta­tively assessed by the population. A better under­standing of the quality of public spaces forms the basis for identi­fying the actions needed to upgrade them. This process should be accom­panied by a discussion concerning the distri­b­ution of the generated costs and the added values between the owners and the public sector.

It is time to lay down the next piece of the puzzle. Join us in assem­bling it!

Note: Further infor­mation

The detailed study with the analyses and a defin­ition of the public space types can be found on the Immo-Monitoring

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