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Canyon Lake, Riverside County.

The impact of gated communities on property values Evidences of changes in real estate markets (Los Angeles, 1980-2000) Pretoria, Feb 28 - Mar 3, 2005. Renaud LE GOIX Université Paris 1 Panthéon Sorbonne. Canyon Lake, Riverside County.

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Canyon Lake, Riverside County.

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  1. The impact of gated communitieson property valuesEvidences of changes in real estate markets(Los Angeles, 1980-2000)Pretoria, Feb 28 - Mar 3, 2005 Renaud LE GOIX Université Paris 1 Panthéon Sorbonne Canyon Lake, Riverside County. 15 000 inhabitants live behind this fence, in a privateand gated community, which is also an independentmunicipality.

  2. Introduction • Are gated communities and their private governance effort at risk because of market failures in the private provision of collective goods ?

  3. Introduction • GCs have a cost (infrastructure and collective goods building and maintenance) • Efficiency of a GC = satisfaction of residents • Unsatisfied owners -> turn-over -> risk of urban decayand progressive loss of property values.

  4. Introduction This paper aims at • assessing the impact of gates and walls on property values over time (1980-2000) • addressing if gated properties generate enough value to compensate the cost of private governance.

  5. 1 A systemic analysis:Property values as a key issue

  6. 1 A systemic analysis:Property values as a key issue

  7. 2 Inside the walls:price premium and homogeneity Property values trend inside gated communities, compared to the neighborhood. 1990 Constant US $. - are consistent with the global trend in L.A. : - gated communities prices show a better resistance to real estate market crisis than in regular residential neighborhoods, - After 1996, gated communities values increases faster than in their vicinities. • Protecting property values

  8. 2 Inside the walls:price premium and homogeneity Property values trend inside gated communities, compared to the neighborhood. 1990 Constant US $. - are consistent with the global trend in L.A. : - gated communities prices show a better resistance to real estate market crisis than in regular residential neighborhoods, - After 1996, gated communities values increases faster than in their vicinities. • Protecting property values

  9. 2 Inside the walls:price premium and homogeneity • Discrepancies: • not signif. : 75% • the richer the GC, the better the price premium; • Disadvantage for GCs in middle-class heterogeneous areas. • GCs more expensive than their neighbors ?

  10. 3 Price change vs. increasing costof private governance • 1980-1990: gated communities gain property values...just as the other do...

  11. 3 Price change vs. increasing costof private governance • 1990-2000: the Bubble has burst... And GCs are not as good as expected to make a difference in price.

  12. 3 Price change vs. increasing costof private governance • Price change and risks of market failure.

  13. 3 Price change vs. increasing costof private governance • Price change and risks of market failure.

  14. 3 Price change vs. increasing costof private governance • Leisure World:“Do not bother as long as we are happy”. 1980-1990 1990-2000

  15. 3 Price change vs. increasing costof private governance • Canyon Lake:A threatened “bit of paradise” 1980-1990 1990-2000

  16. Epilogue http://gated.parisgeo.cnrs.fr

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