Empirical effects of the designation of milieu protection areas on the residential property market in Berlin

Figures & data

Figure 1. Study area: Milieu protection areas in Berlin 2020 and heat map of available transaction data 1991–2019.

Figure 2. Number of transactions inside and outside of the MPAs 1991–2019 in the study area.

Figure 3. Change in number of transactions at block level compared to baseline in 1991 derived from the regression model.

^a logarithmic, controlled for location; *** p  < 0.01, ** p < 0.05, * p < 0.10, The first asterisk before the slash shows the significance of the year (main effect), the second asterisk after the slash shows the significance of the MPA effect.

Table 1. Parametric estimates of the overall regression DID model on the number of transactions (ln) and prices (ln).

	Transactions					Prices
	Main Effect Exp. (B)	P	Interaction Effect Exp. (B)	P	Total MPA (Main + Interaction) Exp. (B)	Main Effect	P	Interaction Effect Exp. (B)	P	Total MPA (Main + Interaction) Exp. (B)
Constant	2.045**					6.930***	0.00
Floor Space (ln)						1.069***	0.00	−0.025***	0.00	1.044***
Elevator						0.102***	0.00	0.019***	0.00	0.121***
Balcony						0.026***	0.00	0.016***	0.00	0.043***
Loggia						0.004	0.43	−0.002	0.85	0.002
Cellar in the property						−0.005**	0.01	−0.022***	0.00	−0.027**
Central heating						0.009***	0.00	0.189***	0.00	0.198***
Without bathtub						−0.005*	0.06	0.005	0.32	0.001
Kitchen						−0.086***	0.00	−0.005	0.24	−0.091
Parking space						0.050***	0.00	−0.012	0.49	0.038
WC						0.010***	0.00	−0.009*	0.09	0.001*
Year ofconstruction before 1945						0.067***	0.00	0.054***	0.00	0.121***
New Construction						0.364***	0.00	−0.108***	0.00	0.256***
Conversion intocondominium	0.082***	0.00	−0.090***	0.00	−0.007***	−0.067***	0.00	0.037***	0.00	−0.030***
Conversion into condominium and transaction after 2015^a	−0.523***	0.00	0.582***	0.00	−0.030***	0.008 ^b***	0.00	−0.054***	0.00	−0.046***
Ground floor or basement						−0.073***	0.00	−0.052***	0.00	−0.126***
Penthouse or maisonette						0.089***	0.00	−0.029**	0.02	0.060**
Public funding for object						−0.098***	0.00	−0.049***	0.00	−0.147***
Free of occupancy						0.154***	0.00	0.086***	0.00	0.239***
Travel time to station						−0.006***	0.00	−0.003**	0.01	−0.009**
Travel time to university						0.001***	0.00	0.002***	0.00	0.003***
Kernel Density clubs, bars, nightclubs						0.001**	0.01	0.00*	0.05	0.001*
Year 1992	−0.066*	0.02				0.100***	0.00
Year 1993	−0.184**	0.00				0.129***	0.00
Year 1994	−0.132**	0.00				0.112***	0.00
Year 1995	−0.081***	0.00				0.077***	0.00
Year 1996	−0.207***	0.00	−0.583**	0.01	−0.790**	0.052***	0.00	0.006	0.88	0.058
Year 1997	0.234***	0.00	0.152	0.34	0.386	0.004	0.40	0.168***	0.00	0.172
Year 1998	0.408***	0.00	0.001	0.99	0.409	0.010*	0.09	0.130**	0.01	0.140*
Year 1999	0.002	0.92	−0.142	0.38	−0.140	−0.070***	0.00	0.025	0.54	−0.045
Year 2000	−0.060**	0.01	0.005	0.97	−0.054	−0.091***	0.00	0.126**	0.01	0.036**
Year 2001	0.064**	0.01	0.039	0.80	0.102	−0.117***	0.00	0.191***	0.00	0.074***
Year 2002	−0.067***	0.00	−0.324**	0.04	−0.391**	−0.156***	0.00	0.012	0.71	−0.143
Year 2003	−0.109***	0.00	0.166	0.28	0.057	−0.175***	0.00	0.039	0.39	−0.136
Year 2004	−0.077***	0.00	−0.021	0.89	−0.098	−0.229***	0.00	0.022	0.58	−0.206
Year 2005	0.077***	0.00	−0.441***	0.00	−0.364***	−0.243***	0.00	0.112**	0.01	−0.131**
Year 2006	−0.022	0.34	−0.197	0.20	−0.219	−0.197***	0.00	0.083*	0.06	−0.114*
Year 2007	0.111***	0.00	−0.485***	0.00	−0.374***	−0.129***	0.00	0.153***	0.00	0.025***
Year 2008	−0.150***	0.00	0.227	0.13	0.077	−0.126***	0.00	0.248***	0.00	0.122***
Year 2009	−0.170***	0.00	−0.088	0.56	−0.258	−0.140***	0.00	0.223***	0.00	0.084***
Year 2010	0.121***	0.00	−0.136	0.37	−0.016	−0.112***	0.00	0.242***	0.00	0.130***
Year 2011	0.292***	0.00	−0.105	0.48	0.187	−0.015*	0.08	0.265***	0.00	0.250*
Year 2012	0.291***	0.00	−0.120	0.42	0.171	0.087***	0.00	0.285***	0.00	0.372***
Year 2013	0.314***	0.00	−0.055	0.71	0.259	0.198***	0.00	0.266***	0.00	0.464***
Year 2014	0.228***	0.00	−0.092	0.54	0.137	0.283***	0.00	0.275***	0.00	0.558***
Year 2015	0.877***	0.00	−0.763***	0.00	0.114***	0.355***	0.00	0.303***	0.00	0.659***
Year 2016	0.770***	0.00	−0.653***	0.00	0.117**	0.466***	0.00	0.320***	0.00	0.786***
Year 2017	0.603***	0.00	−0.766***	0.00	−0.163***	0.590***	0.00	0.319***	0.00	0.909***
Year 2018	0.362***	0.00	−0.733**	0.01	−0.371**	0.677***	0.00	0.328***	0.00	1.004***
Year 2019	0.073**	0.01	−0.446***	0.00	−0.373**	0.772***	0.00	0.327***	0.00	1.099***
MPA	−0.148	0.54				−0.369***	0.00
R Square	0.149					0.814
Adjusted R Square	0.148					0.814
n (Observations)	221.702					221.328

The table shows the variables of the regression DID model in which MPAs were included as interaction variables in a joint estimation. The total coefficient in MPA is the product of the main effect and the interaction effect MPA. Due to space constraints, the regressors of the individual local districts in the DID pricing model are listed in Table 2 in the appendices. Travel times are via public transport. Standard errors are heteroscedasticity robust and assessed for collinearity. *** p < 0.01, ** p < 0.05, * p < 0.10. The explained variance in the transaction-model is relatively small at 0.139 (R²), this does not affect the interpretation of the differences between the main effect and the interaction effect. The interaction model increases the explanation of variation by approximately 10%.

^a This is an interaction variable which is summed up with the main effect and was already added to the main effect.

Table 2. Selected Regression-DID estimates of MPA effect on prices and number of transactions, 1991–2019.

Explanatory variable	Dependent variable: ln (No. of transactions)	Dependent variable: ln (Price)
	(1)	(2)
MPA (dummy)	−0.148	−0.369***
Floor space (ln)	-	−0.025***
Conversion into condominium	−0.090***	0.037***
Central heating	-	0.189***
Balcony	-	0.016***
Year of construction before 1945	-	0.054***
Year 2015	−0.763***	0.303***
Year 2016	−0.653***	0.320***
Year 2017	−0.766***	0.319***
Year 2018	−0.733**	0.328***
Year 2019	−0.446***	0.327***
Property characteristics	No	Yes
Local districts fixed effects	Yes	Yes
Year fixed effects	Yes	Yes
Observations	221.702	221.328
R-squared	0.149	0.814

Note: MPA = Milieu Protection Area, *** p < 0.01, ** p < 0.05

Figure 4. Average price inside and outside of the MPAs 1991–2019 in the study area.

Figure 5. Change in condominium prices compared to baseline in 1991 derived from the hedonic model.

^a logarithmic, derived from the regression DID model in Table 1; *** p < 0.01, ** p < 0.05, * p < 0.10, The first asterisk before the slash shows the significance of the year (main effect), the second asterisk after the slash shows the significance of the MPA effect.

Table A1. Description of the variables used in the regression DID.

Variable	Explanation
Floor Space (ln)	Total floor area of the apartment.
Elevator	The condominium is equipped with an elevator with which the apartment can be reached.
Balcony	The condominium is equipped with a private balcony.
Loggia	The condominium is equipped with a private loggia.
Cellar in the property	The condominium is equipped with a cellar room or equivalent storage room on an independent ancillary space.
Central heating	The condominium has collective heating (otherwise only stove heating is installed).
Without bathtub	The condominium has a sanitary room, but it is not equipped with a bathtub.
Kitchen	The condominium already has a built-in kitchen.
Parking space	A private parking space is assigned to the condominium.
WC	The condominium has a separate sanitary room with toilet and hand basin.
Year of construction before 1945	The building of the condominium was built before 1945.
New Construction	The building of the condominium was built not earlier than 5 years before the transaction.
Conversion into condominium	The condominium was built as a rental apartment and was converted into a condominium prior to the transaction.
Conversion into condominium and transaction after 2015	See ‘Conversion to condominium’, moreover, the transaction took place after 2015.
Ground floor or basement	The condominium is located on the ground floor or basement.
Penthouse or maisonette	It is a maisonette or penthouse condominium.
Public funding for object	The condominium was financed with social housing funds (does not mean that it is currently still social housing).
Free of occupancy	The condominium is vacant/ currently having no tenant.
Travel time to station	Distance to the nearest train station by public transport in minutes.
Travel time to university	Distance to the nearest university by public transport in minutes.
Kernel Density clubs, bars, nightclubs per sqkm	Forms a centrality measurement by the density function of bars, cafes, clubs.
Year	The year in which the transaction took place.
MPA	The condominium was/ has been in a milieu protection area at the time of the transaction.
State is seller	The state or an organisation belonging to the state is the seller of the condominium.

Table A2. Descriptive statistics.

Descriptive Statistics						Descriptive Statistics: Outside Milieu Protection						Descriptive Statistics: Within Milieu Protection
	N	Min	Max	Mean	St. Dev.		N	Min	Max	Mean	St. Dev.		N	Min	Max	Mean	St. Dev.
Price	221,703	14,875	1,870,000	167,709.85	137,076.72	Price	195,987	14,875	1,870.000	161,667.71	133,576.85	Price	25,716	15,000	1,085,000	213,758.24	153,659.51
Per sqm	221,024	1,200	6.999	2.212.58	1.209.80	Per sqm	195,310	404	8,974	2,125.16	1,163.37	Per sqm	25,714	411	9,209	2,876.57	1,342.30
Year	221,703	1991	2019	2008	7.55	Year	195,987	1991	2019	2007.25	7.52	Year	25,716	1995	2019	2012.94	5.68
Living space	221,453	30	150	73.02	32.78	Living space	195,737	30	150	72.99	32.72	Living space	25,716	30	150	73.24	33.25
Penthouse or maisonette	221,703	0	1	0.02	0.15	Penthouse or maisonette	195,987	0	1	0.02	0.15	Penthouse or maisonette	25,716	0	1	0.03	0.17
Ground floor location	221,703	0	1	0.15	0.36	Ground floor location	195,987	0	1	0.15	0.36	Ground floor location	25,716	0	1	0.12	0.33
Public funding for object	221,703	0	1	0.14	0.35	Public funding for object	195,987	0	1	0.15	0.36	Public funding for object	25,716	0	1	0.04	0.20
Central heating	221,703	0	1	0.94	0.24	Central heating	195,987	0	1	0.93	0.25	Central heating	25,716	0	1	0.98	0.13
Kitchen or kitchenette	221,703	0	1	0.82	0.39	Kitchen orkitchenette	195,987	0	1	0.83	0.38	Kitchen or kitchenette	25,716	0	1	0.80	0.4
Free of occupancy	221,703	0	1	0.64	0.48	Free of occupancy	195,987	0	1	0.64	0.48	Free of occupancy	25,716	0	1	0.63	0.48
State is seller	221,703	0	1	0.57	0.49	State is seller	195,987	0	1	0.02	0.50	State is seller	25,716	0	1	0.00	0.01
Balcony	221,703	0	1	0.48	0.50	Balcony	195,987	0	1	0.48	0.50	Balcony	25,716	0	1	0.45	0.50
Elevator	221,703	0	1	0.41	0.49	Elevator	195,987	0	1	0.42	0.49	Elevator	25,716	0	1	0.33	0.47
Own cellar space	221,703	0	1	0.72	0.45	Own cellar space	195,987	0	1	0.73	0.44	Own cellar space	25,716	0	1	0.65	0.48
Parking space	221,703	0	1	0.05	0.22	Parking space	195,987	0	1	0.06	0.23	Parking space	25,716	0	1	0.03	0.17
Building age	221,567	−2	148	78.95	41.75	Building age	195,851	−2	148	76.34	41.16	Building age	25,716	−2	148	98.90	40.76
Conversion to condominium	221,703	0	1	0.59	0.49	Conversion to condo-minium	195,987	0	1	0.59	0.49	Conversion to condo-minium	25,716	0	1	0.58	0.49
In the MPA at the time of thetransaction	221,703	0	1	0.12	0.32	In the milieu protection area at the time of the transaction	0	0	0	0.00	0.00	In the milieu protection area at the time of the transaction	25,716	1	1	1.00	0.00
MPA decision year	25,716	1995	2019	2012	7.38	MPA decision year	0	0	0	0	0	MPA decision year	25,716	1995	2019	2012	7.38
Travel time to university (public transport)	221,703	1	38	14.88	6.75	Travel time to university (public transport)	195,987	1	38	14.65	6.94	Travel time to university (public transport)	25,716	3	33	16.61	4.89
Travel time to station (public transport)	221,703	5	55	25.12	7.25	Travel time to station (public transport)	195,987	5	55	25.27	7.63	Travel time to station (public transport)	25,716	9	46	23.99	3.64

^afor several reasons, such as multicollinearity, small contribution, not all of those listed in the descriptive statistics have been processed in the DID model.

Table A3. Regressors of the individual local districts in the hedonic price model.

	Transactions					Prices
	Main EffectExp. (B)	Sig.	Interaction Effect	Sig.	Total MPA (Main + Interaction)	Main EffectExp. (B)	Sig.	Interaction EffectExp. (B)	Sig.	Total MPA (Main + Interaction)
			Exp. (B)		Exp. (B)					Exp. (B)
Local district Adlershof	0.188***	0.00				0.327***	0.00
Local district Alt Hohenschönhausen	0.173***	0.00				0.142***	0.00
Local district Alt Treptow	0.414***	0.00	-0.175	0.47	0.240	0.13***	0.00	0.1	0.22	0.23
Local district Baumschulenweg	-0.336***	0.00				0.103***	0.00
Local district Britz	-0.369***	0.00	0.962***	0.00	0.593***	0.11***	0.00	-0.009	0.85	0.1
Local district Charlottenburg	-0.098***	0.00	-0.319	0.18	-0.416	0.239***	0.00	0.043	0.53	0.283
Local district Charlottenburg Nord	0.351***	0.00				0.113***	0.00
Local district Fennpfuhl	-0.156**	0.03				0.005	0.69
Local district Friedenau	-0.580***	0.00				0.251***	0.00
Local district Friedrichsfelde	0.837***	0.00	-0.905***	0.00	-0.067***	0.125***	0.00	-0.143	0.1	-0.018
Local district Friedrichshain	0.624***	0.00	-0.101	0.60	0.523	0.265***	0.00	-0.043	0.62	0.222
Local district Gesundbrunnen	0.081***	0.00	0.976***	0.00	1.056***	-0.016**	0.04	0.083	0.18	0.067
Local district Hansaviertel	0.333***	0.00				0.168***	0.00
Local district Johannisthal	-0.177***	0.00				0.092***	0.00
Local district Kreuzberg	0.257***	0.00	-0.075	0.69	0.182	0.162***	0.00	0.084	0.1	0.245
Local district Lichtenberg	0.181***	0.00				0.027***	0.00
Local district Mariendorf	-0.199***	0.00				0.151***	0.00
Local district Mitte	0.603***	0.00	-0.669**	0.04	-0.065**	0.325***	0.00	0.069	0.40	0.395
Local district Moabit	-0.118***	0.00	0.246	0.21	0.128	0.06***	0.00	0.032	0.49	0.093
Local district Neukölln	-0.015	0.38	0.504**	0.01	0.489	-0.043***	0.00	0.287***	0.00	0.244***
Local district Niederschöneweide	0.516***	0.00	0.815***	0.00	1.332***	0.233***	0.00	0.004	0.99	0.237
Local district Niederschönhausen	-0.432***	0.00				0.196***	0.00
Local district Oberschöneweide	0.636***	0.00	-0.358	0.12	0.278	0.301***	0.00	-0.245***	0.00	0.057***
Local district Pankow	0.224***	0.00	0.360*	0.06	0.584*	0.236***	0.00	0.045	0.47	0.28
Local district Plänterwald	0.205***	0.00				0.084***	0.00
Local district Prenzlauer Berg	0.632***	0.00	-0.050	0.79	0.582	0.367***	0.00	-0.046	0.32	0.321
Local district Rummelsburg	0.380***	0.00	0.220	0.29	0.600	0.143***	0.00	0	0.93	0.143
Local district Schöneberg	-0.063***	0.00	0.172	0.37	0.109	0.195***	0.00	0.058	0.28	0.253
Local district Steglitz	-0.556***	0.00				0.206***	0.00
Local district Tempelhof	-0.129***	0.00	-0.098	0.64	-0.227	0.062***	0.00	0.027	0.68	0.09
Local district Tiergarten Süd	0.078***	0.01	0.620**	0.01	0.697**	0.396***	0.00	-0.144*	0.07	0.252*
Local district Wedding	0.114***	0.00	1.116***	0.00	1.230***	-0.027***	0.00	0.138**	0.01	0.111**
Local district Weissensee	0.086***	0.00	0.178	0.39	0.263	0.21***	0.00	-0.063	0.31	0.147
Local district Wilmersdorf	0.038**	0.01				0.251***	0.00