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Housing externalities : evidence from spatially concentrated urban revitalization programs

Author

Listed:
  • Raymond E. Owens
  • Esteban Rossi-Hansberg
  • Pierre-Daniel G. Sarte
Abstract
Using data compiled from concentrated residential urban revitalization programs implemented in Richmond, VA, between 1999 and 2004, we study residential externalities. Specifically, we provide evidence that in neighborhoods targeted by the programs, sites that did not directly benefit from capital improvements nevertheless experienced considerable increases in land value relative to similar sites in a control neighborhood. Within the targeted neighborhoods, increases in land value are consistent with externalities that fall exponentially with distance. In particular, we estimate that housing externalities decrease by half approximately every 990 feet. On average, land prices in neighborhoods targeted for revitalization rose by 2 to 5 percent at an annual rate above those in the control neighborhood. These increases translate into land value gains of between $2 and $6 per dollar invested in the program over a six-year period. We provide a simple theory that helps us interpret and estimate these effects.

Suggested Citation

  • Raymond E. Owens & Esteban Rossi-Hansberg & Pierre-Daniel G. Sarte, 2008. "Housing externalities : evidence from spatially concentrated urban revitalization programs," Working Paper 08-03, Federal Reserve Bank of Richmond.
    • Handle: RePEc:fip:fedrwp:08-03
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    References listed on IDEAS

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    Cited by:

    1. Ingrid Gould Ellen & Katherine O'Regan, 2010. "Welcome To The Neighborhood: How Can Regional Science Contribute To The Study Of Neighborhoods?," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 363-379, February.
    2. Bento, Antonio M. & Franco, Sofia F. & Kaffine, Daniel T., 2011. "Effectiveness of housing revitalization subsidies in the presence of zoning," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 196-206, May.
    3. Kevin A. Bryan & Pierre-Daniel G. Sarte, 2009. "Semiparametric estimation of land price gradients using large data sets," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 95(Win), pages 53-74.

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    Keywords

    Housing; Land use; Economic development; Federal Reserve District; 5th;
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