An Exploration of the Impact of Infill on Neighborhood Property Values

Smart growth policies, in order to curtail low-density sprawl, seek to increase development in existing communities. These policies promote infill development, projects built on underutilized parcels in and surrounded by developed areas. While smart growth advocates view reduced sprawl as a benefit, local residents often fear infill will increase traffic congestion, eliminate open space, and result in other costs. Unfortunately, we know little about infill development overall and its impacts specifically. This dissertation addresses this gap by exploring residential infill development in Montgomery County, MD during the l990s and early 2000s. This highly developed suburban jurisdiction experienced growing pains due to increased development during this time. The county also saw smart growth policies enacted, making it an excellent case study. The research first describes county residential infill trends from 1990 to 2006 and identifies infill sites. This section defines and offers a measure for infill development and identifies trends and patterns, focusing on changes in infill levels or characteristics. Next, the research uses hedonic pricing models to explore changes in nearby home values pre- and post-infill. A difference-in-difference design provides a comparison group analysis. Twenty-six infill sites were selected because they were built in relatively undisturbed residential neighborhoods, making such analysis possible. This research found infill to be a common occurrence throughout the study period, regularly comprising 70% of all residential units built. The study did not find changes in infill development coinciding with a particular smart growth policy. Instead, infill mimicked overall development trends. Infill did have considerably smaller lot and structure sizes than non-infill. The hedonic pricing models found negative impacts on home values associated with some infill projects, with price declines ranging from 2 to 5%. The impact varied by development type, with large projects causing the greatest price declines. Additionally, wealthier neighborhoods experienced a negative infill home price effect, while poorer areas experienced a positive effect--although not significant. Overall, positive outcomes were not the rule, and infill appears to generate costs. Planners and policymakers need to take this in to consideration when promoting infill