The effect of land subsidence on real estate values

Wouter Willemsen*, Sien Kok, Onno Kuik

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Land subsidence in the Netherlands, mainly occurring in its western and northern peat and clay soils, causes significant damage to houses and infrastructure, estimated at EUR17 billion until 2050, through differential settlement of shallow foundations, negative skin friction and fungal decay of timber piles. Various studies and reports both in The Netherlands and abroad have addressed the potential economic impacts of subsidence on houses: yet, these studies lack spatially detailed data and instead rely on generic assumptions on expected damage restoration costs. By using a hedonic pricing model, this study examines the impact of subsidence on housing prices in the Dutch cities of Rotterdam and Gouda. In contrast to earlier studies, subsidence and its impact on property values are examined at house level. We test for the effect of subsidence with data related to (i) general (uniform) subsidence (mm yr-1), (ii) differential subsidence of a building and (iii) subsidence of the surrounding area in relation to the house. Results show that uniform subsidence has the largest impact on property values with approximately -6 %, while differential and surrounding subsidence show respectively -2% and no effect. These results could prove useful to policymakers, homeowners and housing corporations by generating a better understanding of the impact of subsidence on property values and subsequently to create awareness and spur investments in measures to mitigate damage. It should be noted that these results are specific to the research area are therefore not immediately scalable to other cities as local conditions differ.

Original languageEnglish
Pages (from-to)703-707
Number of pages5
JournalProceedings of the International Association of Hydrological Sciences
Volume382
DOIs
Publication statusPublished - 22 Apr 2020
Event10th International Symposium on Land Subsidence, TISOLS 2020 - Delft, Netherlands
Duration: 17 May 202121 May 2021

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