The spatiotemporal impact of urban elderly care facilities on residential value and the resulting governance implications

Abstract

As the world is increasingly witnessing an aging society, the demand for elderly care facilities has gradually increased. However, there is controversy regarding the impact of 'establishing elderly care facilities on surrounding residents' in both academia and urban governance practices. To clarify this debate and introduce innovation to the discussion, this paper addresses the influence mechanism (that is, the amenity effect or the ‘not-in-my-back-yard’ effect) of the establishment of elderly care facilities on surrounding housing prices. Based on the data of 26,215 gated residential communities and 595 elderly care facilities in Shanghai and using a fixed-effect regression, we find that elderly care facilities have nonlinear effects. After considering distances from residential communities, establishment time, and different types of elderly care facilities, the results indicate significant heterogeneity. The conclusions have important policy implications for selecting suitable locations to build elderly care facilities and balance the dual interests of local governments and the private sector.