Stigmatized property is real estate burdened with an external negative effect. Individual cases are spread along a broad spectrum, along many dimensions that include the rational and the irrational, the acute and the chronic. Examples for the stigmatizing effect are a nearby airport, ground water contaminated by chemicals, presence of a high-voltage power line, and so on. Evaluation of these properties needs special methodology. Stigma can reduce the property’s market value through a particular, multi-layered filter. The author systematically examines the professional literature’s cases of evaluation of stigmatized properties. The research aims to organize and compare the cases in order to calculate the market value of stigmatized properties. Based on the analysis, six significant dimensions are identified. A focus group of 19 experts examined and individually evaluated the stigmatizing effects along these different dimensions. The author suggests that it is possible to estimate the stigma’s effect and compare different cases to one another effectively. The results allow the international methodology of valuation to be processed.
One of the most prominent tourist attractions in Budapest is the ruin pub district. Here, in ruined, rundown buildings, clubs that are mainly aimed at young foreigners, participants in party tourism, have sprung up like mushrooms. In Inner Erzsébetváros, the housing prices have significantly risen, since investors see the short- or long-term renting of the apartments as a good opportunity. Those who live in the district, however, find the noise of parties to be too loud, while the crowd and the dirt reduces their quality of life. The apartments located near these pubs are so-called “stigmatized properties”, since their value is shaped by the - positive or negative - opinion of the community. Using the method of hedonic analysis, this article examines the question of whether ruin pubs are a blessing or a curse to surrounding apartments, whether their effect increases or, on the contrary, decreases the apartments’ values.
Based on the international literature, the effect of an existing panoramic view on the market value of properties is positive and significant. This value-adding factor varies by location and by type of view. In Central Europe, no such evaluation study has been elaborated until now. New building construction may restrict the existing panorama, and this is the other side of the same phenomenon. View restriction may result in stigmatization, which is a negative effect on the property. There are two major methodologies to observe the effect: revealed preference method (RPM) and stated preference method (SPM). One SPM approach is contingent valuation (CV), wherein well-informed stakeholders give their opinion about the impact caused by the investigated effect. The CV methodology, using the Delphi approach, was employed to observe the market value decrease in the cases of several restricted panorama situations in Budapest. Based on the research, this effect in Budapest is in line with the published western results. The result of the study can be used to support real estate developers and architects in their development decisions. This is an extended version of the article titled “The impact of view-restriction: a Delphi case study from Budapest”, presented at Creative Construction Conference 2018, CCC 2017, 30 June to 3 July 2018, Ljubljana, Slovenia.