Neighbourhood reputation influences choice when buying and renting property

PhD candidate Marnix Koopman says that residents know from experience just how good or bad their neighbourhood is. Strangers who are looking for property need to find out for themselves what the situation is regarding a neighbourhood’s social qualities, which are often concealed. The neighbourhood’s reputation can serve as a simple rule of thumb for those who are looking for property yet who are ill-informed.

Koopman has researched whether the use of neighbourhood reputations is reflected in the choices made by housing association clients and in the prices of homes on the market.

The relatively poorly informed renters who are looking for dwellings tend not to be influenced in their decisions by issues related to the social qualities of the neighbourhood, since most of them cannot be knowledgeable of these factors, compared to the well-informed local residents.

Disseminating positive information about a neighbourhood, whether correct or not, can impact the image of the neighbourhood, resulting in an inflationary trend among home sale prices. In other words, a neighbourhood that is rumoured to be gentrifying, will naturally attract a more socially upward demographic.

According to Koopman, simply changing the name of a neighbourhood or district can cause housing prices to rise, even if there is no measurable change in the built environment or the demographic composition of the local residents.

Koopman: "The neighbourhood’s reputation becomes a kind of self-fulfilling prophecy, and the neighbourhood gradually starts to conform to its new reputation."

According to his research, when a high-income household suspects that other high-income households are moving to a specific neighbourhood, then the neighbourhood naturally becomes a more attractive place to live.

Marnix Koopman, 2012, Economic analysis of neighbourhood quality, neighbourhood reputation and the housing market ISBN 978-1-61499-032-1 (print) ISBN 978-1-61499-033-8 (online)

The defence of Marnix Koopman’s doctoral dissertation will take place on Friday 10 February at 12:30 in the Senate Hall of the Aula building of TU Delft. Interested members of the press are welcome to attend.

A review copy of the dissertation is available from IOS Press, e-mail: info@remove-this.iospress.nl,

T: +31 (0)20 688 3355, F: +31 (0)20 687 0039  For more information on the research please contact Helen Jager, OTB Research Institute, tel. +31 (0)15 2783675