Summary
The traditional mechanisms of private covenants and public restrictions may not meet the needs of residential property owners who want to preserve a certain neighborhood style. Privately initiated and publicly enforced conservation district regulations can preserve desirable neighborhood characteristics and signal to buyers that neighborhood conformity will likely persist. This study examined residential transaction prices in Dallas, Texas and finds premiums associated with residential properties within and buffering conservation district locations. These results are robust to the spatial autocorrelation common in residential transaction prices.
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Conservation Status and Residential Transaction Prices: Initial Evidence From Dallas, Texas
As neighborhoods age, concerned property owners and potential buyers anticipate that residential improvements will be in a manner consistent with the neighborhood's standards. Accordingly, private contracts and public regulations are used to control urban residential property. A prime example of a private contract that provides for some neighborhood aesthetics is the neighborhood's covenants, which are a land-use control typically initiated by the original developer.
As it relates to maintaining a neighborhood long-term, however, developers cannot reasonably be expected, and lack the incentive, to anticipate market conditions and consumer desires far into the future. Hence, on the private side, restrictive covenants typically do not meet the need of residents to maintain a neighborhood and extend the natural progression of the neighborhood's lifecycle.On the public side, typical zoning requirements regulate property use and set minimal standards for land use intensity. Similarly, municipal construction codes are generally written with respect to structural integrity and occupant safety, and are not primarily concerned with architectural style and craftsmanship of a particular epoch. With the notable exception of historic district regulations, traditional public land use controls are concerned pr...See the full content of this document
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