The aim of this paper is to assess the marginal effect of land-use locational externalities on the sale price of single-family houses, considering various spatial scales—in accordance with perception theories—and trade-off with accessibility to the city centre. From land-use and vegetation data derived from aerial photographs and Landsat TM satellite images, two sets of hedonic models, using OLS regression, are built from two samples of single-family properties sold in Quebec City. A standard model integrates property-specific factors, census factors, accessibility, and location attributes. In a second model, land-use and vegetation variables are considered on various spatial scales; a third step introduces the interaction effect of the surrounding land use with location, with car-time distance to the main activity centres being used as the main indicator. This allows for an analysis of the spatial variation of the environmental impact throughout the city considering relative proximity to the centre. The successful integration of environmental variables concerning location enhances our understanding of the local land-use and vegetation effects. It also improves the overall performance of the model while virtually removing spatial autocorrelation among residuals. Such models could be used in order to assess the fiscal impacts of various land zoning by law policies, thereby providing planning administrations with a useful decisionmaking tool.
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