Environmental drivers of housing prices and thermal inequality using satellite imagery: A submarket approach

This study explores how environmental conditions shape housing prices across different neighborhoods. By combining satellite imagery with data from over 32,000 property transactions in Tehran, we investigate how environmental factors, including greenery, urban heat islands, and urban density, affect housing values. Our analysis reveals that environmental quality, as measured by indicators such as vegetation, urban heat island effects, and urban density, is a significant determinant of housing prices. However, clear spatial inequalities exist, where wealthier northern districts benefit from cooler temperatures and better-managed green spaces, which in turn boost property values. In contrast, residents in southern and peripheral areas face higher heat exposure and limited vegetation, contributing to lower housing prices. These patterns reflect deeper issues of environmental injustice, where access to green amenities and climate comfort is unevenly distributed. To address this, we recommend targeted investments in green infrastructure, particularly in underserved areas, and greater integration of environmental criteria into housing and urban planning policies.