Small town resilience: Housing market crisis and urban density in Italy

Since the 1990s, city development has been promoted through densification processes by both localauthorities and private investors in Europe and USA. This trend began in a boom phase of the real-estatemarket, sustained by high market demand and high prices. The aim of the present study is to see howthe market has responded to six years of economic recession in Italy and whether urban form has arelationship with housing market performance. Is urban density still preferable in terms of the economicsustainability of investments? Or has the demand side of the market changed its behaviour? To elucidatethis issue, we perform a multivariate regression and a cluster analysis on housing price variations from2008 to 2014 with a dataset of economic and urban structure variables concerning the 114 most importantItalian cities. The results suggest that housing market in less dense cities is more resilient and affordablethan in denser cities during a recession phase. This phenomenon should be taking into account by localpublic authorities addressing and promoting urban development.