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Urban Renewal and Inequality: Evidence from Chicago’s Public Housing Demolitions

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Abstract
This paper studies one of the largest spatially targeted redevelopment efforts implemented in the United States: public housing demolitions sponsored by the HOPE VI program. Focusing on Chicago, we study welfare and racial disparities in the impacts of demolitions using a structural model that features a rich set of equilibrium responses. Our results indicate that demolitions had notably heterogeneous effects where welfare decreased for low-income minority households and increased for White households. Counterfactual simulations explore how housing policy mitigates negative effects of demolitions and suggest that increased public housing site redevelopment is the most effective policy for reducing racial inequality.

Suggested Citation

  • Milena Almagro & Eric Chyn & Bryan Stuart, 2023. "Urban Renewal and Inequality: Evidence from Chicago’s Public Housing Demolitions," Working Papers 23-19, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:96774
    DOI: 10.21799/frbp.wp.2023.19
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    1. Brian A. Jacob, 2004. "Public Housing, Housing Vouchers, and Student Achievement: Evidence from Public Housing Demolitions in Chicago," American Economic Review, American Economic Association, vol. 94(1), pages 233-258, March.
    2. Maisy Wong, 2013. "Estimating Ethnic Preferences Using Ethnic Housing Quotas in Singapore," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(3), pages 1178-1214.
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    4. Matias Busso & Jesse Gregory & Patrick Kline, 2013. "Assessing the Incidence and Efficiency of a Prominent Place Based Policy," American Economic Review, American Economic Association, vol. 103(2), pages 897-947, April.
    5. Rebecca Diamond & Tim McQuade & Franklin Qian, 2019. "The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco," American Economic Review, American Economic Association, vol. 109(9), pages 3365-3394, September.
    6. Rebecca Diamond & Tim McQuade, 2019. "Who Wants Affordable Housing in Their Backyard? An Equilibrium Analysis of Low-Income Property Development," Journal of Political Economy, University of Chicago Press, vol. 127(3), pages 1063-1117.
    7. Aliprantis, Dionissi & Hartley, Daniel, 2015. "Blowing it up and knocking it down: The local and city-wide effects of demolishing high concentration public housing on crime," Journal of Urban Economics, Elsevier, vol. 88(C), pages 67-81.
    8. Rebecca Diamond, 2016. "The Determinants and Welfare Implications of US Workers' Diverging Location Choices by Skill: 1980-2000," American Economic Review, American Economic Association, vol. 106(3), pages 479-524, March.
    9. Sebastian Galiani & Alvin Murphy & Juan Pantano, 2015. "Estimating Neighborhood Choice Models: Lessons from a Housing Assistance Experiment," American Economic Review, American Economic Association, vol. 105(11), pages 3385-3415, November.
    10. Joseph Gyourko & Albert Saiz & Anita Summers, 2008. "A New Measure of the Local Regulatory Environment for Housing Markets: The Wharton Residential Land Use Regulatory Index," Urban Studies, Urban Studies Journal Limited, vol. 45(3), pages 693-729, March.
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    Cited by:

    1. Victoria Gregory & Julian Kozlowski & Hannah Rubinton, 2022. "The Impact of Racial Segregation on College Attainment in Spatial Equilibrium," Working Papers 2022-036, Federal Reserve Bank of St. Louis, revised 06 May 2024.
    2. Cody Cook & Pearl Z. Li & Ariel J. Binder, 2023. "Where to Build Affordable Housing? Evaluating the Tradeoffs of Location," Working Papers 23-62, Center for Economic Studies, U.S. Census Bureau.
    3. Stephen J. Redding & Daniel M. Sturm, 2024. "Neighborhood Effects: Evidence from Wartime Destruction in London," NBER Working Papers 32333, National Bureau of Economic Research, Inc.
    4. Brunåker, Fabian & Dahlberg, Matz & Kindström, Gabriella & Liang, Che-Yuan, 2024. "Revitalizing poor neighborhoods: Gentrification and individual mobility effects of new large-scale housing construction," SocArXiv g5rzn, Center for Open Science.
    5. Wang, Yixuan, 2024. "Urban Redevelopment and Gentrification: Evidence from the Atlanta BeltLine," 2024 Annual Meeting, July 28-30, New Orleans, LA 343550, Agricultural and Applied Economics Association.
    6. Disa M. Hynsjö & Luca Perdoni, 2024. "Mapping Out Institutional Discrimination: The Economic Effects of Federal “Redlining”," CESifo Working Paper Series 11098, CESifo.

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    More about this item

    Keywords

    Urban Renewal; Inequality; Segregation; Endogenous Neighborhood Change;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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