The Low-Carbon Rent Premium of Residential Buildings
| Item Type | Monograph (Working Paper) |
| Abstract | Based on 39,791 rental contracts from 2,438 residential properties in the Swiss real estate market, we study how a property’s CO2 emissions affect net rental values. We use a novel measure of operational carbon emissions which relies on various parameters related to the sustainability and energy efficiency of a building as well as climate conditions of its location. After controlling for a building’s state, its macro and micro location, local rental market conditions and various property or apartment characteristics in an extensive hedonic framework, our results suggest that apartments in low-carbon buildings have higher net rents. This effect is mainly driven by lower ancillary costs of sustainable apartments in contrast to tenants’ higher preferences for environmentally-friendly living. We underline this result by sample splits across urban and rural areas, warm and cold locations, as well as regions with a high and low share of people supporting a Federal Act for the Reduction of Greenhouse Gas Emissions in Switzerland. Based on 432 residential building transactions, we also show that low-carbon buildings have lower capitalization rates which translate into higher market values due to lower risk premiums. |
| Authors | Brändle, Angelika; Füss, Roland; Schläpfer, Jörg & Weigand, Alois |
| Language | English |
| Keywords | CO2 Emissions, Energy Efficiency, Net Rents, Residential Buildings, Sustainability |
| Subjects | business studies economics finance |
| HSG Classification | contribution to scientific community |
| HSG Profile Area | SOF - System-wide Risk in the Financial System |
| Date | 21 June 2022 |
| Publisher | SoF HSG |
| Place of Publication | School of Finance Working Paper Series |
| Volume | 2022 |
| Number | 04 |
| Number of Pages | 34 |
| Official URL | https://papers.ssrn.com/sol3/papers.cfm?abstract_i... |
| Contact Email Address | alois.weigand@unisg.ch |
| Depositing User | Alois Weigand |
| Date Deposited | 22 Jun 2022 08:13 |
| Last Modified | 29 Jul 2022 07:11 |
| URI: | https://www.alexandria.unisg.ch/publications/266521 |
DownloadFull text not available from this repository. (Request a copy)CitationBrändle, Angelika; Füss, Roland; Schläpfer, Jörg & Weigand, Alois: The Low-Carbon Rent Premium of Residential Buildings. , 2022, 04. Statisticshttps://www.alexandria.unisg.ch/id/eprint/266521
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