The Impact on Housing Values of Restrictions on Rights of Ownership: The Case of an Occupant's Age

A. Quang Do and G. Grudnitski

Real Estate Economics, 1997, vol. 25, issue 4, 683-693

Abstract: With the exception of anecdotal information, little is known about the specific effects on the value of a house because its ownership is restricted to people older than a certain age. This article provides an empirically‐derived assessment of the impact on the selling price of single‐family residences when their ownership is age restricted. To determine the effect on the sales price of age‐restricted houses, a standard hedonic pricing model is applied to a sample of 371 sales transactions drawn from a suburban area of a large city. The results indicate that an age restriction placed on houses decreases their value by 6%. This finding may be of interest to local land‐use regulators, developers who are considering developing age‐restricted houses and appraisers who wish to make value adjustments to these homes.

Date: 1997
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