Equity in job accessibility and environmental quality in a segmented housing market: The case of Greater London

Highlights

• Sub housing markets are defined by price band to reflect housing affordability.

• Lower-price submarkets hardly reach most accessible places.

• Lower-price submarkets only offer flats and no houses in moderately accessible places.

• Trading off environmental quality for job accessibility is more rewarding in lower-price submarkets.

Abstract

Job accessibility and environmental quality are rarely equally distributed in spatial and/or social dimensions within metropolitan regions. Availability of these affects the quality of residential locations, and can be expected to be capitalised into house prices. For prospective house owners, their options will be limited to sub housing markets within certain price bands depending on their available housing budgets. Availability and marginal prices of job accessibility and environmental quality, as well as trade-offs between them, might be different between these submarkets. Using Greater London as the case metropolitan region, this study explored such differences, to shed light on the role of housing market in equity and/or inequity in job accessibility, environmental quality and their interactions. Results of this study show that lower-price submarkets have advantages in job accessibility in terms of marginal price, but are disadvantaged in terms of availability. Differences are more mixed in marginal price and availability between the submarkets for environmental quality. When balancing job accessibility and environmental quality within constrained housing budgets, households in lower-price submarkets would find it relatively easier to gain job accessibility with less sacrifice on environmental quality as compared to those searching in higher-price submarkets, but hard to reach the higher levels of job accessibility that are mainly reserved for the higher-price submarkets.

Introduction

Job accessibility and environmental quality are important opportunities and resources that contribute to well-being (Grengs, 2010; Rehdanz and Maddison, 2008). Their distributions, however, are often unequal in spatial and/or social dimensions within metropolitan regions, as the distributions can be affected by various factors such as ecological and physical constraints, predefined standards in the planning systems, political activism, and market process (Lucy, 1981; Mitchell, 2005; Talen, 1998).

Regardless of varied concepts of fairness, numerous studies have demonstrated the unequal distributions. For job accessibility, most studies have compared areas resided by different socioeconomic groups and found lower job accessibility is generally associated with poorer socioeconomic conditions (Hernandez, 2018; Lucas, 2012; Slovic et al., 2019). Travel mode and cost have also been considered, as socioeconomically disadvantaged groups normally have less access to cars (Grengs, 2010; Kawabata and Shen, 2007) and high cost of public transport can also be a large barrier for these groups in addition to travel time and distance (Carruthers et al., 2005; El-Geneidy et al., 2016). Some studies focus specifically on accessibility to low-income jobs which is more valuable for socioeconomically disadvantaged groups, and further evidence the disparities against these groups (Elldér et al., 2012; Legrain et al., 2016).

For environmental quality, results have been more mixed. While most Northern American studies show that socioeconomically disadvantaged areas tend to experience higher air pollutions, European studies reveal more ambiguous patterns with inconsistent findings (Deguen and Zmirou-Navier, 2010; Hajat et al., 2015; Temam et al., 2017). Much less research has been done on noise, but mixed relationships between socioeconomic condition and noise exposure are also revealed (Dreger et al., 2019). In terms of distribution of greenspaces, lower levels of access are often found in association with poor socioeconomic conditions (Ferguson et al., 2018; Vaughan et al., 2013). However, contrasting patterns also exist with more deprived areas enjoying better access (Barbosa et al., 2007; Kessel et al., 2009), and there are arguments that differences in the definition and measurement of greenspace quality and distribution can lead to biased and conflicting conclusions (Mears and Brindley, 2019).

Job accessibility and environmental quality affect the quality of residential locations, and can be expected to be capitalised into house prices. Based on hedonic price modelling (Rosen, 1974), much research has been devoted to studying the values or implicit prices of individual housing attributes, including job accessibility and environmental quality. Improvements in job accessibility, measured simply as mean distance or travel time to employment centres, or using more complex functional formulations to account for non-linear distance deterrence and competition, are found to lead to substantial increase in house price (Osland and Thorsen, 2008; Ottensmann et al., 2008). Improvements in environmental quality, e,g., reductions in particulate concentration (Kim et al., 2010; Smith and Huang, 1995) and exposure to transport noise (Baranzini et al., 2010; Lake et al., 1998), higher access to greenspaces (Liebelt et al., 2018; McLeod, 1984), are also shown to increase house price, although generally in smaller magnitudes as compared to the effect of job accessibility.

Properties with both high job accessibility and high environmental quality will not only be expensive, but may also be scarce in metropolitan regions, since accessibility and pollution are both externalities of urban agglomeration, and often co-occur in metropolitan regions (da Schio et al., 2019; Higgins et al., 2019). Thus, when choosing properties, prospective house owners often need to make a trade-off between job accessibility and environmental quality within the available and affordable housing market. The trade-off preference may depend on the price ratio of accessibility and environmental quality, and other factors like ranges of available/existing accessibility and pollution levels (Higgins et al., 2019). Napton and Day (1992) shows that many people, including those from high income groups, are willing to trade off air quality for improved accessibility, when options are limited. While in Hamersma et al. (2015), the higher association between perceived highway nuisances and moving intentions indicates residents' preference for environmental quality over accessibility.

As with their uneven distributions, marginal prices of job accessibility and environmental quality, as well as trade-offs between them, may also differ within a metropolitan region. It has long been argued that a unitary metropolitan housing market is unlikely to exist, instead, the market is segmented into submarkets, and capitalisations of housing attributes differ between the submarkets (Goodman and Thibodeau, 1998; Watkins, 2001). Numerous studies have shown the existence and significance of housing submarkets, defined in spatial and/or structural dimensions (Maclennan and Tu, 1996; Wu and Sharma, 2012), by household income groups (Munro, 1986; Schnare and Struyk, 1976), or by empirical cluster analysis (Day, 2003; Keskin and Watkins, 2017). In this study, we define and examine submarkets by price band, since for prospective house owners, their options will be limited to properties within certain price bands depending on their available housing budgets (Hausman and Wise, 1980; Stone, 2006), and thus, within certain patterns of availability and marginal prices of, and trade-offs between, job accessibility and environmental quality.

Therefore, this study aims to explore the potential differences in the availability and marginal prices of, and trade-offs between, job accessibility and environmental quality within metropolitan regions. In particular, this study compares the differences for households with different housing budgets. Greater London was used as the case metropolitan region, and a database of structural, neighbourhood, environmental and accessibility attributes of the sample properties was built for spatial analysis and hedonic price modelling. Submarkets by price band were examined to define housing markets that were affordable for the different household groups. While this study does not debate on equity judgements, i.e., who should get what, findings of this study will shed light on the role of housing market in equity and/or inequity in job accessibility, environmental quality and their interactions in metropolitan regions.

The remaining part of the paper is structured as follows: Section 2 describes the dataset and variables used in this study; Section 3 details the steps of defining submarkets by price bands and developing hedonic price models; Section 4 analyses the results and compares the submarkets; and Section 5 concludes the paper.