Playborhood Survey III: Parents Are Willing to Pay for Play

[NOTE: This is the third in a series of four articles on the Playborhood Survey. See Playborhood Survey: Who Responded to read about how we solicited responses and who responded. The survey is now closed. If you’d like, you can respond to the same survey questions, for future analysis, here.]

In the first article on the Playborhood Survey, we showed that parents want their children to play more. In this article, I’ll show that they’re willing to pay big $$$ for that desire.

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81.4% of parents said they would move to a new house in a neighborhood adjacent to their current one that has “significantly better play opportunities for your child(ren)” if the move cost them no money. Of the 18.6% who said they would not move, many commented that the cost of moving outside of money costs is just too high.
Then, they answered the question, “How much additional money would you pay” for this house? The results are shown above. The bottom line of these data is that they would be willing to pay a lot.

Let’s put these numbers in perspective. Recall that 75% of all respondents are from the San Francisco Bay Area. In October 2007 the median price for a house in the Bay Area was $625,000, but the median price for houses of respondent parents is likely to be much higher – perhaps $1 million.

Nonetheless, the median amount of money that a parent would be willing to pay in the survey is about $50,000, so, in rough terms, parents are willing to pay 5% extra for a house in a neighborhood with better play opportunities.

This is a very large figure, especially when one steps back to think about the fact that real estate agents usually have zero or next to zero helpful information about play opportunities for prospective residents of a house. To determine whether a house has good play opportunities for a family’s kids, the parents would want to know things like the ages and exact locations of all kids in the neighborhood, how often kids play outside and what they do, whether kids walk to school, how well-equipped the closest parks are, and whether kids from that neighborhood frequent that park.

Instead of providing detailed information on these questions, they know lots about trivia like termite inspections and kitchen counters.

So. obviously, there is an unmet market need in the residential real estate market for information on play opportunities. In fact, one parent commented, “I think it’s hard to know before you buy a house what the neighborhood is like, specifically how many children and what ages they are.”

Sure, it’s hard to know this, but the fact remains that this is vital information for parents.

I’d like to make one other very important point: If it were possible to get information to prospective buyers on the play opportunities of a house’s neighborhood, the price of houses with good play opportunities would go up by, say, 5% or so.

Thus, as this information becomes available, neighborhoods will have a monetary incentive to provide better play opportunities for kids. In other words, apart from the benefits to kids, some parents may want their kids to have more pickup basketball games or games of tag, and then publicize this fact, because it increases their property values.

This may seem like a crass analysis, but in economics, individual incentives do matter, even if they’re not the only reason people do things. So, for instance, people keep their lawns and front foliage neat and trimmed not only because it makes them feel better when they look at their house, but also because doing so increases their property values.

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2 Responses to Playborhood Survey III: Parents Are Willing to Pay for Play

  1. Simon Firth says:

    Mike — that’s an interesting analysis, but there are a couple of other intangibles here that I’m not sure you can easily factor in. One is that while there may be children on your chosen street, you simply can’t guarantee that they won’t move away the day you move in. Moving somewhere because you have specific neighbors, then, seems a risky thing to do.

    Also, there’s no guarantee that your children will either like those specific kids, or that you the parent will like the way that they behave. While a predisposition on the part of parents towards unstructured play make me predisposed to like them, if their kids turn out to be violent bullies in said play, that’s a deal breaker for me.

    Two solutions come to mind. One is to pick a neighborhood less on the specific current occupancy of its homes and more on the resources it has to attract more families in the future. You also want to look for a rising trend of new families moving in, it seems to me, some of whom you might reasonably hope to match well with.

    My other thought is that the best way to know a neighborhood is to live there. Renting in the area in which you are considering buying seems to be a great way to go. That way you can really get to know it, and the families living there, well before making what, in CA certainly, is the insanely huge commitment to buy. That way, too, you will be moving near already-established friends, rather than stranger families that you are trusting to become friends.

    Lastly, it’s been my experience that just a couple of years difference in ages between neighboring children makes a huge difference in how much they like to play together. So you can have families living next door to each other, but not necessarily living in free play nirvana. My children are better friends with kids a block or two away than the kids living directly across the street, simply because of their age differences.

    So widening the concept of ‘neighbor’ to a few blocks or so might help a family in search of a family-friendly house find what they are looking for.

  2. Mike Lanza says:

    Simon:

    Re the comment that you can’t guarantee that someone won’t move, certainly, I agree, but that doesn’t mean that kids being around isn’t important. To give two analogous examples.

    First, let’s say I buy season tickets to Golden State Warriors basketball games, and one of my primary reasons is that I really like their point guard Baron Davis. Well, I realize that there’s no guarantee he’ll be playing all year – he could very well get traded or seriously injured – but I still buy the tickets.

    Second, I plan a trip to Hawaii over Christmas and New Years because I want to enjoy hot, sunny weather on the beach. Sure, I realize that it could very well rain every day during that period, but I buy the tickets anyway.

    Re your solutions, I like the first one – namely, picking a neighborhood that has structural advantages vis-a-vis kids and play. Actually, my wife and I have been searching for that *plus* the presence of lots of kids our kids ages. Unfortunately, we have lots of other requirements (e.g. big house w/ lotsa bedrooms), so we’ve been looking for a while.