The capitalization of urban attributes in housing markets: Could urban planning affect people's wealth?

Medellín, once infamous as the world's most violent city, has managed a remarkable transformation over the last two decades by applying the principles of social urbanism. The central idea was to invest the greatest amount of resources, of the highest quality and aesthetic, in the poorest and most violent parts of the city. This article applies a spatial hedonic pricing model in order to examine the implicit price of proximity to rapid urban transit stations, public spaces, improved schools and a mixture of land uses, all characteristic elements of Medellín's urban upgrade. Our results suggest that public spaces and a mixture of land uses are the most valuable amenities for the poor. Proximity to rapid transit urban railway and bus stations (the Medellín Metro system), public spaces and primarily residential areas are also positive amenities for Medellín. In addition, we do not find evidence that proximity to improved schools or cable car stations has had a significant impact on housing values.