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5 THE REGION’S COMMUNITIES AND THE VALUE PROPOSITION  T hus far, we have described the many ways in which the geographic distribution of employment, housing, and education—built on a base of class, race, and spatial disparities—reinforces these very same disparities , as the region expands and decentralizes. Residents of the region are keenly aware of these differences when they make decisions about where to locate . This chapter looks at how their choices are affected by jobs, housing markets , and schools. It explores this question: to what extent are households using a “value proposition” that includes assessments of both the opportunities available within particular locations and the costs in taxes and commuting times? The concept of a value proposition originated in the business world, but it need not be limited to that context. It began as a business diagnostic— assessing the contribution of a product or service line to a business by examining the value it added to the business. As a tool in assessing business locations, the term denoted the process of evaluating the mix of land costs, a labor pool, wages, taxes, and transportation costs when expanding or relocating . We will use the term to examine how households evaluate a community’s mix of schools, public safety, proximity to jobs, and access to recreational amenities when they make housing choices. Both the flight from declining value markets and the demand for new housing appear to be influenced by such factors as educational access and public safety. Thus, we suggest that individual homeowners engage in their own assessments of the value proposition, comparing residential locations by access to jobs (where the travel times affect potential choices), traditional community status concerns (community reputation), and the resale or appreciation (investment value) of a house. Housing thus acquires value from its community context. In a recent analysis of the greater Philadelphia housing market, incorporating twenty-one counties in Pennsylvania, New Jersey, Delaware, and Maryland, Sirmans and Macpherson1 found that the highest prices for homes were found, regardless of county, where housing approached a suburban model: newer, larger homes in good repair, with a greater number of beds and baths, and with environmental amenities. In a subsequent meta-analysis of multiple studies of metropolitan housing markets,2 Sirmans, MacDonald, and Macpherson reported that the perceived quality of school districts had a positive effect on house price, while public safety concerns (crime) depressed prices. By contrast, the perception of a home purchase as an investment decision may discourage buyers from considering areas where they perceive that values are declining. Especially in older communities, factors like proximity to parks or employment centers may not be sufficient to sustain the value of the housing market if lenders and buyers regard the area as declining. Even proximity to good jobs does not guarantee high market demand for houses; as we saw in Chapter 2, some neighborhoods located close to good jobs may have housing markets priced low enough for low-income renters and buyers. Outward signs like vacancy and abandonment can quickly undermine the perception of outsiders as to the investment value of nearby properties. In Chapter 3, we reported that an abandoned house in Philadelphia has been estimated to diminish the market value of nearby properties by as much as $7,627. This chapter examines the contextual factors that affect the value of a house. What is the value proposition that buyers engage in as they assess a home? And by extension, on what factors do elected officials focus when they seek to support residential values and maintain their tax base? Why Do People Move? Research tells us people move largely because of housing and neighborhood conditions. Two main streams of research have sought to explain the choices movers make. The first is a line of sociological research following a classic work about Philadelphia published by Peter Rossi in 1955, Why Families Move,3 which reported survey findings from four neighborhoods in Philadelphia (Oak Lane, West Philadelphia, Kensington, and Center City). The survey asked both why respondents left a previous location and what attracted them to their new homes. The most important factor prompting people to move was dissatisfaction with the amount of space in their homes, followed 142 C H A P T E R F I V E by complaints about their neighbors and the costs of either renting or maintaining their current homes. As attractions toward their new locations, the respondents focused on features of the housing unit, for...


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MARC Record
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