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OF MIDWAY HILLS

cD

July 27, 2009 • V3

Myth of the

Week

editor’s note:

Myth: There Is A CD Ordinance Fact: “No” signs around our
to Vote on At this Time neighborhoods might give you the impression that there is an ordinance already prepared and ready for a vote. Not true. Any ordinance that comes before the neighborhood for a vote will be crafted by representatives from both sides of the issue with the assistance of the City of Dallas. These signs are (and have been) premature. No committee has yet been formed and no ordinance has been written. There will not be a vote for several months to come.

I have heard that those of us who generally support a CD are not being sensitive to the right of each resident to have his or her own opinion. The reality, however, is that one of the primary goals of the Disney Street Conservation Committee (“DSCC”) is not to stifle opinions but rather to ensure that opinions can be formed based on factual data. The main topic of this edition of the CD Updater is a perfect example – Property Values. The argument that property value growth within a CD will lag behind values for properties outside the boundaries of a CD is directly contradicted by factual third-party research. Thus, the following article is intended to communicate the results of this research, not to tell anyone what position he or she should take on the issue. The CD Updater is here to provide information and dispel misinformation, nothing more and nothing less. How (if) this information is used is the decision of each individual resident. But please use it. And if you find inaccuracies, please challenge anything and everything. Chip Bensing

Value appreciation – What Does the research Say?
For two years the disneystreetssayno.com site and related flyers have proclaimed that property values increase

CDs to areas without designation actually concludes just the inside and within 150 feet opposite – values increase faster of CDs as compared to non

iF you WoulD preFer to receiVe an electronic VerSion oF the Weekly upDater, pleaSe SenD your eMail aDDreSS to: kikiron@FlaSh.net

exponentially faster outside of have exhorted the same claim and the term “stagnation” has there are no formal studies in The only published research

designated areas. This study,

contact us
eMail
kikiron@flash.net

CDs. Builders and developers

entitled Conservation Status and Residential Transaction Prices: Initial Evidence from Dallas,

phone Web

come in vogue. As it turns out, existence that back these claims. comparing value accretion in

Texas, was published in 2008 by Diaz, Hansz, et al in the Journal of Real Estate Research and is available on the web at

Kiki Paschall: 214 357 4797 Chip Bensing: 214 366-3156 Carlos Cardoza 214 350-7466

www.disneystreets.org

http://ssrn.com/abstract=1086196.

SalieNt poiNtS from the Study iNclude the followiNg:

Historic Districts. These studies demonstrate that value premiums for properties within term. Historic Districts continue over the longer

1. Dallas is considered an “ideal” location
for the study because “the community has been aggressive in establishing CDs. Additionally, Dallas is unique because numerous diverse architectural styles were introduced into neighborhoods in the early 1900s, and as the century progressed, many builders were more focused on

the fiNal coNcluSioN of the Study iS aS followS:

“The results of this study demonstrate a positive and statistically significant relationship between residential sale prices and properties located within CDs. There is also evidence of a spillover premium for property adjacent to the CDs. On average, the results suggest that CDs increase the the districts. These findings, including

square footage than adhering to a certain

2. Two different statistical models were

architectural style.”

employed yielding price premiums for

3. These same two models confirmed the

properties inside CDs of 17.6% and 15.7%. ripple effect that has been recorded in areas adjacent to historic districts, yielding feet of CDs of 11.7% and 10.4%. price premiums on properties within 150

value of residential properties in and around the magnitude of the found premiums, are District papers.”

consistent with the majority of the Historical

4. Price premiums associated with CDs far
exceed any incremental administrative costs.

The bottom line is that, despite the dire

predictions we have seen, initial evidence of residential property, at least in Dallas,

shows that the way to maximize the value is to set up a CD. Why? The statement in these restrictions on property rights may promote neighborhood conformity and

The one significant qualification to this study was that CDs are relatively new as a form of land control, so there is not sufficient data

this study is quite simple. “Used properly,

available to research or put forth conclusions on the long term implications of CDs. The study does note, however, that the results observed with respect to CDs correlate

buyer confidence in continued neighborhood stability, thus increasing property values within and possibly surrounding a designated area.”

closely with numerous prior studies involving