Abstract
In large-scale residential developments, developers often use building covenants to regulate the use of land to determine the minimum size of a lot, the dimensions of buildings as well as building appearance among other attributes. These regulations are meant to preserve property values. We study three residential developments in Yokohama City examining house sales data and surveying residents. We find that (1) houses in covenant-restricted developments are sold at higher prices than similar properties outside of them, and (2) shared facilities in these developments that are meant to provide additional utility increase interactions among development residents. Since a building covenant needs to be governed and renewed by a residents' voluntary organization, communication among residents in everyday life may increase the likelihood of continuation of the covenant and thereby retain the value of houses.
