Subdividing the sprawl: Endogenous segmentation of housing submarkets in expansion areas of Santiago, Chile

Abstract

Urban sprawl is a phenomenon observed in most cities around the globe and especially in Latin America, where it is associated to socioeconomic segregation. In the case of Chile, sprawl has been generally based on large real estate projects. Developers target their projects to different types of consumers, which translates into submarkets with a broad range of housing-unit’s characteristics, but also different location strategies. This heterogeneity has been analyzed and measured in the literature, but quantitative studies have used exogenous or sequential methods to identify submarkets, leading to potential bias in the segmentation. In this paper, we propose an econometric model to measure location drivers for different types of real estate projects that fills this gap. The modeling framework is based on discrete-choice and latent-class models, allowing us to simultaneously identify market segmentations, and their particular location choice preferences, without the need of arbitrary or ex-ante definitions of submarkets. The model is applied to the city of Santiago, Chile. The results reveal two clearly different approaches taken by developers to produce housing, with one submarket of “exclusive” and more sprawling projects, and another submarket of “massive” and more density driven projects. Location strategies are very different between submarkets, reproducing the socio-spatial segregation already observed in the consolidated city.

Compact development and preferences for social mixing in location choices: Results from revealed preferences in Santiago, Chile

“…Since Walker and Li (2007) we can find several applications of LC in location choice models (Cox & Hurtubia, 2020; Ettema, 2010; Liao et al, 2014; Lu et al, 2014; Olaru et al, 2011), which are based on the standard McFadden's (1978) choice model for housing location.…”

“…Since Walker and Li (2007) we can find several applications of LC in location choice models (Cox & Hurtubia, 2020;Ettema, 2010;Liao et al, 2014;Lu et al, 2014;Olaru et al, 2011), which are based on the standard McFadden's (1978) choice model for housing location. Cox and Hurtubia (2021) propose an application of LC in a bid-auction framework, which is useful to endogenously segment locations (i.e., space) into classes, and observe how preferences vary among them, accounting for spatial heterogeneity and improving model fit.…”

Developing climate-responsive cities: exploring the environmental role of interstitial spaces of Santiago de Chile

“…The city is used as a basis for abstraction and generalisation, though the role of interstitial spaces in creating climate-responsive cities has salience to the vast majority of urban areas. unregulated urbanisation beyond the urban limit (Flores et al 2017), inequal distribution of green and open space (Banzhaf et al 2013), and high-rates of sociospatial segregation (Cox & Hurtubia 2020). The city reflects planning rationales adjusted to facilitate urban growth supported by privatisation of land and infrastructure (Zegras 2003), and centralisation of social housing supply (Heinrichs and Nuissl 2015).…”

Determinants of urban sprawl in Latin America: evidence from Santiago de Chile

“…Although the term 'urban sprawl' has its origins in the Anglo-Saxon literature, case studies from the Global South can contribute to further insights on how urban sprawl is manifested. This is particularly sensitive in Latin America in which sprawling growth reveals clear signs of sociospatial segregation (Cox and Hurtubia 2020), and are often a subject of standardised planning solutions unable to articulate the cultural, historical, socioeconomic, political, and geographical singularities.…”