Cities

The value of open space is often capitalized into higher residential property prices for homes located nearby. But is closer always better? We examine this question using a hedonic regression applied to pooled cross-sectional housing data from Germany spanning 2007–2023. We distinguish between two types of open space – parks and protected areas (PAs) – which differ in their primary objectives of recreation and conservation. Identification relies on fine-scale regional fixed effects combined with a difference-in-differences framework. We find that proximity to parks significantly increases home prices, with effects that attenuate as distance increases. In contrast, proximity to PAs outside their boundaries has little effect on prices, while properties located within PAs experience substantial price discounts. Using spatially referenced socio-economic data, we conduct a post-estimation analysis to quantify the aggregate value of open space and its distribution across income groups. We estimate the total value of parks at approximately €983 billion – about 4% of the housing stock. In terms of residential proximity, this value is distributed relatively evenly across income groups, though value-weighted analysis reveals that higher-income households capture a disproportionate share of the aggregate benefit, reflecting higher property values in wealthier neighborhoods near parks. The aggregate value of PAs is estimated at -€5.2 billion, though sensitivity analysis reveals this figure is highly uncertain, ranging from -€21 billion to +€16 billion.