IDEAS home Printed from https://ideas.repec.org/a/eee/lauspo/v113y2022ics0264837721006001.html
   My bibliography  Save this article

Removal and reconstruction: Multi-period price effects on nearby housing from urban village redevelopment

Author

Listed:
  • Peng, Ying
  • Tian, Chuanhao

Abstract

The removal and reconstruction of urban villages can improve the residential environment in the vicinity and promote the willingness of buyers to pay. A detailed investigation of the price effects on nearby housing generated by urban village redevelopment helps to capture the added value of public investment. Previous studies often ignore the temporal variation of the price effects. Furthermore, they confuse the price effects from the removal of dilapidated housing and the construction of new buildings. Based on the listing prices in 2017–2018 and transaction data in 2015 of secondhand residential housing in Hangzhou, China, this paper built a multi-period difference-in-differences model to examine the multi-period price effects from urban village redevelopment on nearby housing and to isolate the removal effects of old buildings and the amenity effects of reconstruction. The results show that (1) An anticipatory effect of up to 13% occurs before the urban village redevelopment; removal and reconstruction will bring a total premium of 20% to nearby housing prices; and the total price effects gradually increase in time and slightly fall back after four years. (2) Less than 15% of the added value comes from the removal of dilapidated housing in an urban village, while more than 85% comes from the reconstruction of new buildings. (3) The price effects of large-scale urban village redevelopment are much more obvious.

Suggested Citation

  • Peng, Ying & Tian, Chuanhao, 2022. "Removal and reconstruction: Multi-period price effects on nearby housing from urban village redevelopment," Land Use Policy, Elsevier, vol. 113(C).
    • Handle: RePEc:eee:lauspo:v:113:y:2022:i:c:s0264837721006001
    DOI: 10.1016/j.landusepol.2021.105877
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264837721006001
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.landusepol.2021.105877?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Paredes, Dusan & Skidmore, Mark, 2017. "The net benefit of demolishing dilapidated housing: The case of Detroit," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 16-27.
    2. Qisheng Pan, 2013. "The impacts of an urban light rail system on residential property values: a case study of the Houston METRORail transit line," Transportation Planning and Technology, Taylor & Francis Journals, vol. 36(2), pages 145-169, April.
    3. Elliot Anenberg & Edward Kung, 2014. "Estimates of the Size and Source of Price Declines Due to Nearby Foreclosures," American Economic Review, American Economic Association, vol. 104(8), pages 2527-2551, August.
    4. Pilgram, Clemens A. & West, Sarah E., 2018. "Fading premiums: The effect of light rail on residential property values in Minneapolis, Minnesota," Regional Science and Urban Economics, Elsevier, vol. 69(C), pages 1-10.
    5. Yuan, Feng & Wu, Jiawei & Wei, Yehua Dennis & Wang, Lei, 2018. "Policy change, amenity, and spatiotemporal dynamics of housing prices in Nanjing, China," Land Use Policy, Elsevier, vol. 75(C), pages 225-236.
    6. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    7. Egan, M. & Katikireddi, S.V. & Kearns, A. & Tannahill, C. & Kalacs, M. & Bond, L., 2013. "Health effects of neighborhood demolition and housing improvement: A prospective controlled study of 2 natural experiments in urban renewal," American Journal of Public Health, American Public Health Association, vol. 103(6), pages 47-53.
    8. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-161, April.
    9. Dean H. Gatzlaff & Marc T. Smith, 1993. "The Impact of the Miami Metrorail on the Value of Residences near Station Locations," Land Economics, University of Wisconsin Press, vol. 69(1), pages 54-66.
    10. Yung Yau & Kwong Wing Chau & Daniel Chi Wing Ho & Siu Kei Wong, 2008. "An empirical study on the positive externality of building refurbishment," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 1(1), pages 19-32, April.
    11. 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.
    12. Haizhen Wen & Zaiyuan Gui & Chuanhao Tian & Yue Xiao & Li Fang, 2018. "Subway Opening, Traffic Accessibility, and Housing Prices: A Quantile Hedonic Analysis in Hangzhou, China," Sustainability, MDPI, vol. 10(7), pages 1-23, June.
    13. Mario Du Preez & Michael Sale, 2013. "The Impact of Social Housing Developments on Nearby Property Prices: a Nelson Mandela Bay Case Study," South African Journal of Economics, Economic Society of South Africa, vol. 81(3), pages 451-466, September.
    14. Dye, Richard F. & McMillen, Daniel P., 2007. "Teardowns and land values in the Chicago metropolitan area," Journal of Urban Economics, Elsevier, vol. 61(1), pages 45-63, January.
    15. Yingjie Zhang & Siqi Zheng & Yan Song & Yongguang Zhong, 2016. "The Spillover Effect of Urban Village Removal on Nearby Home Values in Beijing," Growth and Change, Wiley Blackwell, vol. 47(1), pages 9-31, March.
    16. Chengri Ding & Robert Simons & Esmail Baku, 2000. "The Effect of Residential Investment on Nearby Property Values: Evidence from Cleveland, Ohio," Journal of Real Estate Research, American Real Estate Society, vol. 19(1), pages 23-48.
    17. Ariella Kahn-Lang & Kevin Lang, 2020. "The Promise and Pitfalls of Differences-in-Differences: Reflections on 16 and Pregnant and Other Applications," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 38(3), pages 613-620, July.
    18. Claudio A. Agostini & Gastón A. Palmucci, 2008. "The Anticipated Capitalisation Effect of a New Metro Line on Housing Prices," Fiscal Studies, Institute for Fiscal Studies, vol. 29(2), pages 233-256, June.
    19. van Duijn, Mark & Rouwendal, Jan & Boersema, Richard, 2016. "Redevelopment of industrial heritage: Insights into external effects on house prices," Regional Science and Urban Economics, Elsevier, vol. 57(C), pages 91-107.
    20. Lai, Yani & Zheng, Xian & Choy, Lennon H.T. & Wang, Jiayuan, 2017. "Property rights and housing prices: An empirical study of small property rights housing in Shenzhen, China," Land Use Policy, Elsevier, vol. 68(C), pages 429-437.
    21. Zahirovich-Herbert, Velma & Gibler, Karen M., 2014. "The effect of new residential construction on housing prices," Journal of Housing Economics, Elsevier, vol. 26(C), pages 1-18.
    22. Song, Yan & Zenou, Yves, 2012. "Urban villages and housing values in China," Regional Science and Urban Economics, Elsevier, vol. 42(3), pages 495-505.
    23. Antti Tapio Kurvinen & Jaakko Vihola, 2016. "The impact of residential development on nearby housing prices," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 9(4), pages 671-690, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shiran Zhang & Jiaping Yang & Changdong Ye & Weixuan Chen & Yixuan Li, 2023. "Sustainable Development of Industrial Renovation: Renovation Paths of Village-Level Industrial Parks in Pearl River Delta," Sustainability, MDPI, vol. 15(13), pages 1-22, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Peng, Ying & Tian, Chuanhao & Wen, Haizhen, 2021. "How does school district adjustment affect housing prices: An empirical investigation from Hangzhou, China," China Economic Review, Elsevier, vol. 69(C).
    2. Haizhen Wen & Zaiyuan Gui & Chuanhao Tian & Yue Xiao & Li Fang, 2018. "Subway Opening, Traffic Accessibility, and Housing Prices: A Quantile Hedonic Analysis in Hangzhou, China," Sustainability, MDPI, vol. 10(7), pages 1-23, June.
    3. Tian, Chuanhao & Peng, Ying & Wen, Haizhen & Yue, Wenze & Fang, Li, 2021. "Subway boosts housing values, for whom: A quasi-experimental analysis," Research in Transportation Economics, Elsevier, vol. 90(C).
    4. Brunes, Fredrik & Hermansson, Cecilia & Song, Han-Suck & Wilhelmsson, Mats, 2016. "NIMBYs for the rich and YIMBYs for the poor: Analyzing the property price effects of infill development," Working Paper Series 16/2, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    5. Jose Torres-Pruñonosa & Pablo García-Estévez & Josep Maria Raya & Camilo Prado-Román, 2022. "How on Earth Did Spanish Banking Sell the Housing Stock?," SAGE Open, , vol. 12(1), pages 21582440221, March.
    6. Zhong, Haotian & Li, Wei, 2016. "Rail transit investment and property values: An old tale retold," Transport Policy, Elsevier, vol. 51(C), pages 33-48.
    7. Ismail, Mohammad & Wilhelmsson, Mats, 2022. "New housing investments' effects on gentrification and affordability in Stockholm, Sweden," Working Paper Series 22/8, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    8. AlQuhtani, Saad & Anjomani, Ardeshir, 2019. "Do rail transit stations affect housing value changes? The Dallas Fort-Worth metropolitan area case and implications," Journal of Transport Geography, Elsevier, vol. 79(C), pages 1-1.
    9. Nan-Yu Wang & Jen-Yu Lee & Chih-Jen Huang, 2022. "The Effect of the Principal Component Index for Housing Quality Satisfaction on Housing Price: Urban vs. Rural Analysis," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 14(10), pages 1-63, October.
    10. Devaux, Nicolas & Dubé, Jean & Apparicio, Philippe, 2017. "Anticipation and post-construction impact of a metro extension on residential values: The case of Laval (Canada), 1995–2013," Journal of Transport Geography, Elsevier, vol. 62(C), pages 8-19.
    11. Ju-Hee Kim & Young-Kuk Kim & Seung-Hoon Yoo, 2023. "Does Proximity to a Power Plant Affect Housing Property Values of a City in South Korea? An Empirical Investigation," Energies, MDPI, vol. 16(4), pages 1-14, February.
    12. Marcel Fischer & Roland Füss & Simon Stehle, 2021. "Local house price comovements," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 49(S1), pages 169-198, March.
    13. Raul-Tomas Mora-Garcia & Maria-Francisca Cespedes-Lopez & V. Raul Perez-Sanchez & Pablo Marti & Juan-Carlos Perez-Sanchez, 2019. "Determinants of the Price of Housing in the Province of Alicante (Spain): Analysis Using Quantile Regression," Sustainability, MDPI, vol. 11(2), pages 1-33, January.
    14. Anupam Nanda & Jia-Huey Yeh, 2016. "Reflected Glory Versus Repulsive Envy: How Do the Smiths Feel About the House of the Joneses?," Asian Economic Journal, East Asian Economic Association, vol. 30(3), pages 317-341, September.
    15. Blanco, Hector, 2023. "Pecuniary effects of public housing demolitions: Evidence from Chicago," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    16. Ouyang, Yanyan & Cai, Hongbo & Yu, Xuefei & Li, Zijian, 2022. "Capitalization of social infrastructure into China's urban and rural housing values: Empirical evidence from Bayesian Model Averaging," Economic Modelling, Elsevier, vol. 107(C).
    17. Olaru, Doina & Mulley, Corinne & Smith, Brett & Ma, Liang, 2017. "Policy-led selection of the most appropriate empirical model to estimate hedonic prices in the residential market," Journal of Transport Geography, Elsevier, vol. 62(C), pages 213-228.
    18. Barkowski, Scott, 2021. "Interpretation of nonlinear difference-in-differences: the role of the parallel trends assumption," MPRA Paper 108975, University Library of Munich, Germany.
    19. Roth, Jonathan & Sant’Anna, Pedro H.C. & Bilinski, Alyssa & Poe, John, 2023. "What’s trending in difference-in-differences? A synthesis of the recent econometrics literature," Journal of Econometrics, Elsevier, vol. 235(2), pages 2218-2244.
    20. Chun-Chang Lee & Chi-Ming Liang & Hui-Chuan Hong, 2020. "The Impact of a Mass Rapid Transit System on Neighborhood Housing Prices: An Application of Difference-In-Difference and Spatial Econometrics," Real Estate Management and Valuation, Sciendo, vol. 28(1), pages 28-40, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:lauspo:v:113:y:2022:i:c:s0264837721006001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joice Jiang (email available below). General contact details of provider: https://www.journals.elsevier.com/land-use-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.