Effect of public infrastructure on Urban land price: Case of the city of Cuenca, Ecuador

In this paper, the expected sale value of urban properties is analyzed compared to the capital incorporated to the land by infrastructure. For this task, the market prices of 1,393 properties in the city of Cuenca, Ecuador, were collected using different sources, including online ads, realtors, and for-sale signs. The analysis reveals that in 95% of the lots, the capital incorporated by infrastructure represents up to 22.4% of the asking price. However, the profit expected by the owners -expected price minus incorporated capital- is high, reaching an average of 6.35 times the investment cost. Based on the lot's spatial distribution, it was identified that the historic city center and its surroundings were areas where the highest expected profits are seen. Accurately distinguishing the areas that capture these profits can contribute in decision making regarding the capital gains recovery policies generated by public investment.