Feige, A; McAllister, P and Wallbaum, H (2013) Rental price and sustainability ratings: Which sustainability criteria are really paying back? Construction Management and Economics, 31(4), pp. 322-334. ISSN 1466433X
Abstract
Given the centrality of the price mechanism to resource allocation in market economies, the effect of sustainable construction on real estate prices has become an increasingly important empirical issue for market participants and policy makers in the real estate sector. Drawing upon a sample of approximately 2500 residential building units in Switzerland, this study assesses the effects of buildings' sustainability on their rental prices. In contrast to the vast majority of previous studies that have focused on the price effects of eco-labels, this study investigates the effects of individual sustainability attributes. Overall, we find a positive relationship between the environmental performance of residential buildings and their rental levels. Sustainable building characteristics, especially those which enhance the water efficiency, the health and comfort level and the building's safety and security, have significant positive price effects. It is argued that the unexpected negative relationship between energy performance and rental prices is attributed to the bundling of energy costs and rents in Swiss lease structures.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | hedonic model; rent; residential; sustainability; sustainability evaluation |
| Index terms: | bundling, comfort, lease, energy performance, drawing, Switzerland, efficiency, real estate, environmental performance, hedonic model, residential building, resource allocation, eco-label, sustainable construction, energy cost, sustainable building |
| Subjects: | sustainable construction, land economics, resource management, economic analysis, performance management, Geography, construction type, sustainability assessment, financial and cost management, real estate economics, energy systems, cost management, occupational health and safety management, technical documentation |
| Topics: | Design Practice, Sustainability, Construction Technology, Health and Safety, Urban Studies, Site Management, Geographical Context, Business Strategy, Quality Management, Cost Management |
| Descriptive scope: | 3 PCA |
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