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Externalities of Public Housing: The Effect of Public Housing Demolitions on Local Crime

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  • Danielle H. Sandler
Abstract
This paper evaluates the potential for negative externalities from public housing by examining crime rates before and after demolition of public housing projects in Chicago between 1995 and 2010. Using data on block-level crimes by type of crime merged to detailed geographic data on individual public housing demolitions, I find evidence that Chicago's public housing imposed significant externalities on the surrounding neighborhood. Using a difference in difference approach comparing neighborhoods around public housing projects to nearby neighborhoods I find that crime decreases by 8.8% after a demolition. This decrease is concentrated in violent crime. I use an event study to show that the decrease occurs at the approximate date of the eviction of the residents and persists for at least 5 years after the demolition. Neighborhoods with large demolitions and demolitions of public housing that had been poorly maintained display the largest crime decreases.

Suggested Citation

  • Danielle H. Sandler, 2016. "Externalities of Public Housing: The Effect of Public Housing Demolitions on Local Crime," Working Papers 16-16, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:16-16
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    References listed on IDEAS

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    Cited by:

    1. Disney, Richard & Gathergood, John & Machin, Stephen & Sandi, Matteo, 2020. "Does homeownership reduce crime? A radical housing reform in Britain," LSE Research Online Documents on Economics 108426, London School of Economics and Political Science, LSE Library.
    2. Michael Pollmann, 2020. "Causal Inference for Spatial Treatments," Papers 2011.00373, arXiv.org, revised Jan 2023.
    3. Palmer, Caroline & Phillips, David C. & Sullivan, James X., 2019. "Does emergency financial assistance reduce crime?," Journal of Public Economics, Elsevier, vol. 169(C), pages 34-51.
    4. Posada, H. M. & García, A. F. & Londoño, D, 2022. "The external effects of public housing developments on informal housing: The case of Medellín, Colombia," Documentos de Trabajo 20416, Universidad del Rosario.
    5. Katharine L. Shester & Samuel K. Allen & Christopher Handy, 2019. "Concrete measures: the rise of public housing and changes in young single motherhood in the U.S," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(2), pages 369-418, April.
    6. Blanco, Hector, 2023. "Pecuniary effects of public housing demolitions: Evidence from Chicago," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    7. Blanco, Hector & Neri, Lorenzo, 2023. "Knocking It Down and Mixing It Up: The Impact of Public Housing Regenerations," IZA Discussion Papers 15855, Institute of Labor Economics (IZA).
    8. Richard Disney & John Gathergood & Stephen Machin & Matteo Sandi, 2023. "Does Homeownership Reduce Crime? A Radical Housing Reform from the UK," The Economic Journal, Royal Economic Society, vol. 133(655), pages 2640-2675.
    9. David C. Phillips, 2020. "Measuring Housing Stability With Consumer Reference Data," Demography, Springer;Population Association of America (PAA), vol. 57(4), pages 1323-1344, August.
    10. Borges Ferreira Neto, Amir & Nowicki, Jennifer & Shakya, Shishir, 2021. "Do Public Libraries Help Mitigate Crime? Evidence from Kansas City, MO," MPRA Paper 111073, University Library of Munich, Germany.
    11. Steinberg, Matthew P. & Ukert, Benjamin & MacDonald, John M., 2019. "Schools as places of crime? Evidence from closing chronically underperforming schools," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 125-140.
    12. Xue Han & Changchun Feng, 2024. "Effects of Affordable Housing Land Supply on Housing Prices: Evidence from 284 Cities in China," Land, MDPI, vol. 13(5), pages 1-17, April.
    13. Joel Kaiyuan Han, 2022. "Parental involvement and neighborhood quality: evidence from public housing demolitions in Chicago," Review of Economics of the Household, Springer, vol. 20(4), pages 1193-1238, December.

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    More about this item

    JEL classification:

    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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