Many researchers have found that households are willing to pay more for apartments on higher floors than for apartments on the lower floors. Some have also found that corner apartments are higher priced than non-corner apartments. To the best of my knowledge, however, a systematic examination of how intrabuilding location in blocs of apartments affects relative prices of apartments has not been reported in previous research. 

We use two different data-sets for examining empirically how prices are affected by intrabuilding location. Corner apartments and apartments with light from two opposite sides of the building are found to be sold at higher prices than apartments with daylight just from one side. Moreover, like most other researchers we find that the floor at which an apartment is located has an impact on price.

We next address the issue of what will be the optimal concept of building design. In discussing this we account for the fact that differences in building design affect developers’ costs. Moreover, on the demand side of the market we account for the fact that households are non-homogenous in their willingness to pay for different intrabuilding locations. An implication is that the optimal design of buildings usually will differ from one market to another, depending inter alia on the income distribution in the local market. This in turn has the consequence that towns inhabited by populations with different income distributions will differ in their architectural design.