The Effect of Land Use on Housing Price and Rent: Empirical Evidence of Job Accessibility and Mixed Land Use

Recently, the improvement of job accessibility and the encouragement of mixed land use have been gaining popularity in the planning field. However, little is known about whether these two factors are able to meet housing consumers' needs. This study aims to analyze how job accessibility and mixed land use satisfy housing consumers' needs. Particularly, this study investigates housing consumers' willingness to pay for these two features by using housing prices and rents in the Chicago metropolitan area. In order to deal with endogeneity between land use and housing prices and spatial autocorrelation between housing prices, spatial econometric models are used with instrumental variables. Interestingly, our findings show that an increase in job accessibility leads to an increase in housing prices, whereas it is not related to rents. We also found that mixed land use decreases housing prices, but increases rents.