QUANTIFYING COMMUNITY BONDING: IMPACT OF COMMUNITY CENTERS ON PUBLIC HOUSING PRICES

Abstract

Social bonding and sense of community have extensive influence on wellbeing and resilience of individuals and the society. While urban planners have introduced numerous physical facilities such as community centers to promote social bonding among neighborhood residents, the evidence on the effectiveness of these facilities is quite limited. This study attempts to provide quantitative estimation of the price effect of community centers on nearby housing units as well as qualitative analysis of the underlying mechanism through which better opportunities of social bonding contributes to the price differentiation. For quantitative estimation, this study uses the difference-in-difference approach which considers both spatial (i.e. treatment area within 500 meters and control area between 500 and 2000 meters from the newly constructed or upgraded community centers in Singapore) and temporal (i.e. before and after completion of these community centers) variations. To deduce the possible heterogeneous effects by the scale of community centers and intensity of its development (new construction vs upgrading), several subsample analyses are considered. Estimation results show a price discount of 1.53% in the treatment areas after new and upgraded community centers are completed. This is potentially because increasing congestion and crowding effects dominate over positive effects from better opportunities of social bonding. On the other hand, a price premium of 2.47% is observed for the subsample of transactions near the community center of a larger scale, suggesting that scale and intensity are a critical factor for the post-treatment effect of community centers. Qualitative survey findings support these by showing the positive relationship between proximity to community center and residential satisfaction as well as social bonding when the scale of facility is sufficiently large. These findings have important implications on policy and town planning, especially on how to ensure equitable access to social bonding opportunities in the long run without compromising the quality of facilities with adequate scale and design.