How a City’s Infrastructure Planning Impacts Real Estate Prices

When home buyers shop around, they are looking for more than just a nice home they can afford. They are looking for a nice place to live, which means that they desire a certain quality of life. Inadvertently, house hunters actually become neighborhood hunters, and this demand for nice communities with solid infrastructure tends to increase home values. There are many factors that go into what makes a ‘nice neighborhood’ and what exactly house hunters are searching for when looking for future real estate. However, it’s a little easier to analyze infrastructure and how that impacts future real estate prices.

Here are four aspects of urban and suburban planning that pay close attention to infrastructure to improve quality of life and how that impacts the prices surrounding real estate.

Real Estate Development And Investment

There is an ongoing real estate trend that puts residential developers in charge of creating entire neighborhoods. The financial motivation of these developers is to build communities where home values will quickly rise due to high demand from prospective buyers. Suburban developers can do a lot more than build new homes these days: they can also set aside nature preserves, develop community centers, and practice energy-efficient construction; however, they are mostly interested in creating quality of life in areas where adequate infrastructure is found. This can significantly help to improve the quality of life in the areas where they are developing or are looking to develop.

Luxury Housing And Infrastructure

Los Angeles, Miami, New York, San Francisco and Tampa are known as cities where luxurious condominiums sit majestically in front of the water, and where penthouse units can easily fetch a million dollars and enjoy value appreciation year after year. It so happens that these cities have something in common: a major port as an economic driver. This is extremely useful as the port drives the industrial business economy, as well as the tourist side of the economy. It’s a win-win situation from any side you are looking from, and this makes luxury housing and infrastructure in these areas so desirable and popular. Infrastructure is about creating economic opportunities; when civil engineers tackle a major project such as a shipping port, they also look at the potential for revenue and financial activity.

Choosing The Right Infrastructure

Home buyers look for housing opportunities that are convenient to them at the right time. During the housing bonanza of the 21st century, employment levels were at an all-time high and prosperity was in the air; thereby, house hunters predominantly chose the suburbs. After the bursting of the housing bubble, many families moved closer to urban centers that allowed them to live a pedestrian life. To this effect, the cities that enjoyed a higher influx were those that offer a good pedestrian infrastructure and public transportation, qualities that are usually the work of a professional with a master degree in civil engineering. It’s important to consider what the trends of the past, present, and projected future are when looking at areas for future developments plans and opportunities.

Public Perception

When it comes to residential development, home buyers set the pace of demand according to infrastructure. In Florida, for example, home buyers are willing to pay more in neighborhoods where electric cables run underground. In this fashion, the likelihood of being without power after a hurricane is substantially reduced. In places with significant snowfall, residents may be more willing to pay more to live close to the mountains, but in a safe space that reduces the risks of avalanches and landslides. When you consider this, it brings the point close to home that it’s important to remember the area that you’re working in, the trends of the city, what projects currently exist there, and what the needs of the future could be. It’s easy to see how public perception, wants, and needs easily drive real estate prices as they set the demand for areas and future infrastructure.

In the end, the public appreciates good infrastructure, and they will vote with their wallets when it comes to buying real estate that is serviced by adequate infrastructure. Above we discussed four different ways infrastructure planning impacts real estate prices in various different situations. It’s safe to agree that the biggest demand on real estate prices is in fact public demand, and if you understand how infrastructure influences that you are better able to make educated business and personal real estate decisions.

Emma is a freelance writer currently living in Boston, MA. She writes most often on education and business. To see more from Emma, say hi on Twitter @EmmaSturgis2