Pricing the Tide: The Effect of the Mo.S.E. System on the Venetian Residential Market

During the night between November 12 and 13, 2019, Venice was struck by an exceptional high tide, that caused the flooding of 90% of the city. On October 3, 2020, the Mo.S.E. was activated. It is a system of mobile barriers, whose purpose is to reduce the impact of high tides on the city of Venice by isolating the lagoon from the Adriatic Sea whenever a tide exceeding 110 cm is forecasted. The effects of this protection system have been extensively examined with regard to the safeguarding of Venice’s historical, architectural, and artistic heritage, as well as to its ecological and environmental implications. However, only a limited number of studies have investigated its impact on real estate values. The present study contributes to this line of research by analyzing the increase in market values for ground-floor and raised-floor properties located in areas of the city most exposed to high-tide flooding following the activation of Mo.S.E. Using a hedonic price model, we analyze a sample of 240 listings published between 2018 and 2024 collected leveraging a public web archiving site. Advertisements published from 2021 onward exhibit a price premium of approximately 5%, while those posted after 2022 show an effect of about 10%. Additional variables related to suitability for tourist-rental use also display strong positive effects. On the one hand, the study provides evidence of the role of Mo.S.E. in increasing housing market values; on the other, it suggests that these effects may be capitalized primarily by the tourist-rental market.