Water in Residential Environments

In the Netherlands, the estimated rise in sea level together with more irregular and heavier river flows and rainfall require new policies. In particular the region in the western and central part of the country, known as Randstad-Holland, is facing new challenges to cope with water. Do residents move to safe areas as a consequence of this development? At the same time we may observe an increasing consumer popularity of housing areas situated by the coast, lakes, rivers and canals. The mostly American literature on the value attributable to having water in the vicinity of one's home suggests that various externalities increase or decrease the attractiveness of a given location, and thereby bring a positive or negative added value to property prices, depending on a number of factors in relation to water proximity, view, water quality, and flood risk. We argue that this literature falls short as the studies do not fit well with the Randstad circumstances. Furthermore, even for studies where comparable effects are identified any generalizations are difficult, particularly with the proximity variable.