Housing Externalities / Esteban Rossi-Hansberg, Pierre-Daniel Sarte, Raymond Owens III.

Format:

Book

Author/Creator:

Rossi-Hansberg, Esteban.

Contributor:

National Bureau of Economic Research.

Sarte, Pierre-Daniel.

Owens, Raymond, III.

Series:

Working Paper Series (National Bureau of Economic Research) no. w14369.

NBER working paper series no. w14369

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2008.

Summary:

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.

Notes:

Print version record

September 2008.