IMPACT OF NOT IN MY BACKYARD (NIMBY) SYNDROME ON PROPERTY PRICES

Abstract

Given land scarcity in Singapore, her urban planners have comprehensively planned to ensure the most optimal allocation possible. Recently, some proposed developments that are perceived to generate negative externalities have triggered adverse reaction from nearby stakeholders. We investigate if the NIMBY syndrome for elderly housing projects is substantial based on the market reaction to the studio apartments in Toh Yi and the Lions Home For The Elders in Bishan. To the best of our knowledge, this is the first formal study in Singapore that analyses the impact of nursing homes and senior housing, associated with the NIMBY syndrome, on HDB resale prices.

We use the difference-in-difference approach to examine both the spatial and temporal effects. Geographically, the treatment zone is within 200 metres while the control zone is from 200 to 400 metres away from the development. Temporally, we analyse the announcement and completion effects. Most of the regression results show no statistically significant impact of the developments on resale prices. Indeed, we found a 2.9% increase in resale prices after the nursing home in Bishan started operations as compared to before the announcement of the project. Given that the threat to property prices is the main reason for NIMBY-styled objections, this research found no empirical evidence that developments for the elderly compromise neighbouring housing values. Given the aging demographic in Singapore, this can facilitate the planning and co-location of elderly and nursing homes within established residential areas.