EUKN - European Urban Knowledge Network - The social benefits of investing in a safe city

The social benefits of investing in a safe city

Introduction

Is urban prosperity increased by investing in safety? And what are the social benefits of investing in the safety of a large city? The Municipality of Utrecht has conducted research into the benefits of investing in safety in the city.

Description

The question is whether investing extra money in the safety of a city would do more good than investing these funds in culture, green areas or a facelift for the city centre. In economic terms, would the return generated by investing an extra euro in safety be higher than a return generated by investing an extra euro in something else that would benefit Utrecht?

Investing in safety is an expensive venture but it cannot guarantee tangible monetary returns. Citizens do not pay directly for their safety, so it is not easy to derive profitability from the price paid. The public’s appreciation of safety has to be assessed by indirect methods.

Methodology

The research was conducted by applying two methods that showed the relationship between the level of safety in a city and the attractiveness of relocating to that city:

In the hedonistic pricing method, the attractiveness of relocating to a certain city is measured by house prices.
In the economic method using cross-section analysis, the value placed on safety is estimated by linking the safety level of a city to its house prices. This method, however, also considers other factors that could have an impact on house prices such as accessibility and the availability of cultural amenities.

Conclusions

With their demands to live in a certain city and their willingness to pay for this, housing consumers indicate the degree to which they value the amenities and other characteristics of a city.
Violent crime has the greatest impact on the degree to which people feel unsafe. Figures for the Netherlands as a whole show that each violent crime committed for each 1000 inhabitants of a city reduces the value of an average house in that city by about 1100 euros.
An economic cost and benefit analysis could help the Municipality of Utrecht with prioritising its policy.

Contact info

NYFER
Phone: +31 346 291641
nyfer@nyfer.nl

Publication date

01/06/2004

Links

NYFER

De maatschappelijke baten van investeringen in een veilige stad (PDF, Dutch, 72 KB)

Document type

research

Themes

Urban Policy > Housing > Housing management

Keywords

Housing finance