Research and data have been a core part of MVRDV’s identity since the firm’s early days in the 1990s. Over the past 30 years, data analysis has served MVRDV’s designers as a key input for their design ideas; it has helped to fine-tune the floorplans and façades of buildings; and it has become a tool for the creation of “datascapes” that give physical form to the information that underpins our world. But what else can data do for us? Could we use data analysis to understand the impact of our designs?
We were interested in answering one question in particular: what is an MVRDV design actually worth? To figure out this tricky proposition, we approached Springco, with their Automated Valuation Model, to run the numbers. Below is a brief summary of their findings, written by Springco’s Chief information Officer Walter Bokern:
What is the value of neighbouring a beautiful building?
We were quite excited when MVRDV asked us to what extent we would be able to quantify the value of high-quality architecture. Obviously, one intuitively knows that we would all rather live next to beautiful buildings than ugly ones, but beauty is something that is hard to measure.
To complete this task, we decided to further expand our Automated Valuation Model (AVM). This is a machine-learning model that we used to predict the value of all dwellings in the Netherlands. We use a wide variety of different variables as inputs, from the size of the home to the number of trees surrounding it. Since we have put so many different variables into our AVM, we are able to play around with different variables to see how they impact the value of dwellings. We decided to add the proximity to good architecture to the model to investigate the impact it has on the value of nearby homes.
This endeavour naturally introduced several other challenges. First, how does one determine what good architecture is? The Springco team likes to discuss this while having lunch, but we are far from experts on the topic. Fortunately, at the Royal Institute of Dutch Architects (Branchevereniging van Nederlandse Architectenbureaus, or BNA), they are experts and they publish an annual list with buildings they consider the greatest additions from that specific year. We decided to follow their expertise and therefore used that list to train our model and quantify the impact these developments had on the value of surrounding real estate.
The results confirmed our hypothesis: the closer a dwelling is to a beautiful building, the more valuable it turns out to be. It could even result in an additional value of €150 per square meter. This effect decreases the further we move away from the building, but at 1000 meters distance we still see an additional value of €100 per square meter, even while controlling for all other variables.
Evidence for the value of good design, even in tough economic times
We applied this model to several buildings designed by MVRDV and we kept on seeing the same effect. While there is always room for improvement, especially in an approach like this, MVRDV was fascinated by the approach we took to answer their question. Also, the valuation could be leveraged by architects as a tool to showcase the potential value of their designs to aspiring clients. This is an important asset, particularly during uncertain economic times.
Furthermore, it introduces the possibility to use a similar approach to quantify other ‘intangible’ factors. How about the value of placemaking, a park, or specific services? Do you want to know more about the possibilities? Please reach out to Walter Bokern (email@example.com).
Some additional thoughts from MVRDV
For MVRDV, these findings are of course edifying. It’s one thing to believe, in your core, that your work is valuable; it’s quite another to see that value quantified in concrete terms. However, this analysis is not a closed chapter just yet, and raises more questions than it answers. For example, what are the implications of these findings on urban planning – if multiple ambitious designs are found in the same neighbourhood, is their impact on surrounding property values compounded, or is there a point of diminishing returns? Conversely, how can we ensure that this effect of our designs does not contribute to gentrification and its negative social effects? All of these questions will certainly be front of mind as we continue our – apparently very valuable – work.