Effect of Flooding on Megalopolitan Land Prices : A Case Study of the 2000 Tokai Flood in Japan

A framework for analyzing the effect of flooding on land prices is proposed based on a case study of the Tokai flood in September 2000. The flood effect was examined by cross-sectional and panel analyses, panel data comprising land price and its attributes. Interesting findings were that land prices in flood-prone areas are lower and have less variance than in other areas. The price of land for commercial use in flood-prone areas is higher than that for residential or industrial land, and the amount and ratio of diminution also are larger. Spatially, of the three areas in the Tokai region studied, land prices in Nishi Ward, Nagoya are the highest, but diminution and the diminution ratio of land prices vary greatly. It is necessary to differentiate flood effects from the location effect on land prices when estimating the scale of the effect of flooding. The Tokai flood effect has a reverse Z-shaped pattern. At onset, the greater the inundation, the greater the decrease rate. In the case of the Tokai flood of 2000, the flood effect appeared in part in 2001 and in entirety in 2002. The mean of the effect in monetary value was -2204.7 yen/m2 in 2001 and -8888.3 yen/m2 in 2002, change in the rates being -1.27% in 2001 and -4.7% in 2002. The higher the price, the stronger the impact; whereas, the impact on the rate of land-price change was similar regardless of the price. Even so, it seems that residents prefer cheap land rather than low risk of flooding