Does Urban Overheating Affect Neighborhood Attractiveness? Evidence from the French Housing Market

This article investigates urban overheating as an environmental "dis-amenity" that negatively impacts the health and quality of life for residents. By reducing the attractiveness of certain neighborhoods, overheating is hypothesized to exert downward pressure on housing prices. The study utilizes a unique "Thermocity" dataset, which provides high-resolution nighttime land surface temperature data from satellite observations across four French urban units. The methodology combines this climatic data with an exhaustive record of housing transactions from 2013 to 2019. To ensure accuracy, the author employs an "instrumental variable approach" using wind speed to address potential endogeneity in local temperature readings.

The analysis reveals a statistically significant negative relationship between local temperature increases and property values. This effect is not uniform across all studied areas, showing substantial variation between different urban units. The findings are robust even when using alternative measures of overheating from different data sources. As urbanization continues to increase and global temperatures rise, the incidence of urban overheating is expected to become a more prominent factor in the housing market. The research suggests that nearly 81.5% of the French population is now living in urban areas, making this a critical issue for public policy and urban planning.

The most striking finding is that a 1 °C increase in urban overheating is associated with a 2.2% decrease in housing prices. The study analyzed a total of four French urban areas using satellite data. The housing transaction dataset spanned a seven-year period from 2013 to 2019. Furthermore, the study notes that 81.5% of the French population currently resides in urban areas where these overheating effects are most pronounced. These results provide clear evidence of the economic "penalty" associated with living in heat-stressed urban environments.

Vincent, Pierre. "Does Urban Overheating Affect Neighborhood Attractiveness? Evidence from the French Housing Market." *Journal of Housing Economics* 71 (2026): 102111.  https://www.sciencedirect.com/science/article/pii/S1051137725000701