Do Houses of Worship Affect Housing Prices? Evidence from Germany

Authors

  • Sebastian Brandt,

  • Wolfgang Maennig,

  • Felix Richter


  • Sebastian Brandt is the head of real estate controlling at Hansainvest GMBH, Kapstadtring 8, 22297 Hamburg, Germany. His e-mail address is: sebastian.brandt@hansainvest.de. Wolfgang Maennig is a professor at Department of Economics, University of Hamburg, Von-Melle-Park 5, 20146 Hamburg, Germany. His e-mail address is: wolfgang.maennig@uni-hamburg.de. Felix Richter is a research assistant at Department of Economics, University of Hamburg, Von-Melle-Park 5, 20146 Hamburg, Germany. His e-mail address is: felix.richter@wiso.uni-hamburg.de. The authors thank two anonymous referees and seminar participants at the University of Hamburg for their valuable suggestions. The authors would also like to thank F + B Forschung und Beratung für Wohnen, Immobilien und Umwelt GmbH, particularly Dr. Bernd Leutner, for providing the data set on condominium prices, and numerous religious congregations in Hamburg for supplying information on their houses of worship.

Abstract

Using hedonic pricing models, this paper analyzes the impact of houses of worship (HoWs) on the prices of adjacent condominiums in Hamburg, Germany. It addresses the questions of whether this impact differs between Islamic and Christian religious centers, whether potential effects persist even after the house of worship has been deconsecrated, and whether church bells affect residential property prices. This is one of the first studies on this subject to have been conducted outside the U.S. Controlling for spatial dependence and by using potentiality variables, positive externalities of HoWs within a radius of 1,000 m were identified. Compared with properties beyond this threshold, price premiums of 4.6 percent were detected for condominiums at distances of 100–200 m to the next house of worship. The results also show that the positive externalities near mosques do not differ from those of HoWs of other religions and that the positive effect of churches continues to be felt even after they have been deconsecrated. The influence of church bell ringing on the prices of surrounding residential properties, however, could not be substantiated.

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