Enhancing green housing diffusion through density bonuses: An analysis using the Use-Purchase-Supply model

Abstract

Green housing plays a crucial role in advancing sustainable land use and urban development. The evident paradox of the sluggish diffusion of cost-effective green housing has garnered growing attention. This study introduces a Use-Purchase-Supply (U-P-S) model to unveil the “black box” of this paradox and develops a simulation model to quantify the diffusion dynamics of green housing based on the classic "epidemic model". Using China as a case for simulation, the model identifies key drivers, with a specific focus on the impact of density bonuses. The results reveal that lower-rated green housing can proliferate independently, whereas higher-rated green housing development hinges on policy instruments for market traction. Density bonuses demonstrate to be as potent as the reduction of green incremental costs, which is the paramount driver of green housing diffusion. Furthermore, this study extends its insights globally by contrasting core parameters across countries. The U-P-S model enhances the theoretical lens of “how to diffuse sustainability” and functions as a “policy laboratory” for simulating and evaluating the effects of various policy measures on green housing diffusion.