Neighborhood-level Effects of Urban Greening on Heat Mitigation and Property Prices

Climate change is increasingly impacting urban areas worldwide. Climate risks such as heat waves and other extreme weather events threaten health, productivity and urban infrastructure. However, these impacts are not equally distributed across society. Some population groups and neighborhoods are being hit harder than others, with inhabitants from disadvantaged socioeconomic backgrounds, low-income households and the elderly being disproportionally affected. In response, cities are attempting to rapidly implement various mitigation and adaptation strategies that often include nature-based solutions such as expanding urban vegetation to combat heat effects. However, the economic consequences of these interventions for urban residents remain underexplored, raising key questions about whether such strategies alleviate or exacerbate social inequalities.

This study addresses these questions by analyzing the relationship between the urban heat island (UHI) effect, urban vegetation, and residential property values across 15 metropolitan regions in the United States and Germany. To do so, we adopt a data-driven approach that combines property transaction and listing data with satellite imagery of ground cover obtained from the Copernicus Sentinel-2 program from 2015 to 2025. Through geospatial analysis, we quantify a "green premium" - a markup on real estate prices - and its development over time and in regions that are heterogeneous with respect to economic activity, climate zones and urban landscapes. Using this approach, we can identify wealth impacts of urban vegetation and changes in its perceived importance for home buyers over the past 11 years. By further integrating high-resolution thermal data, we examine how local microclimates and green space coverage influence housing values at the neighborhood level. We explore how these effects vary across different socioeconomic and demographic contexts with a focus on equity implications and climate vulnerability, contributing to the growing interdisciplinary literature on climate adaptation, urban planning, and environmental justice.