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The Effect of Residential Investment on Nearby Property Values: Evidence from Cleveland, Ohio

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Author Info
Chengri Ding () (Texas A&M University College Station, TX 77843)
Robert Simons () (Cleveland State University Cleveland, OH 44114)
Esmail Baku () (Neighborhood Reinvestment Corporation Washington, DC 20005)
Abstract

This study analyzes the effect of both new and rehabilitation residential investment on nearby property values in Cleveland, Ohio. The methodology used is hedonic price regression with spatial lagged variables that are generated applying geographic information systems. There are four major findings. First, the effect of investment on property values is geographically limited. Second, new investment has a greater impact on nearby property values than rehabilitation. Third, there is evidence that new construction and rehabilitation have a significantly positive impact in low-income areas, as well as predominantly non-minority neighborhoods. Finally and most importantly, the research suggests that small-scale investment has no impact on nearby property values. Thus, investment policy, which promotes and encourages investments that are not sufficiently large, may not be able to improve tax bases and enhance neighborhoods. We also found that results could be misleading if spatial lagged variables are inappropriately measured.

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File URL: http://aux.zicklin.baruch.cuny.edu/jrer/papers/pdf/past/vol19n01/v19n023_048.pdf
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Publisher Info
Article provided by American Real Estate Society in its journal Journal of Real Estate Research.

Volume (Year): 19 (2000)
Issue (Month): 1 ()
Pages: 23-48
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Handle: RePEc:jre:issued:v:19:n:1:2000:p:23-48

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L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Robert A. Simons & Roberto G. Quercia & Ivan Maric, 1998. "The Value Impact of New Residential Construction and Neighborhood Disinvestment on Residential Sales Price," Journal of Real Estate Research, American Real Estate Society, vol. 15(2), pages 147-162. [Downloadable!]
  2. Kerry D. Vandell & Robert H. Zerbst, 1984. "Estimates of the Effect of School Desegregation Plans on Housing Values Over Time," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 12(2), pages 109-135. [Downloadable!] (restricted)
  3. J F Kain & J M Quigley, 1970. "Evaluating the quality of the residential environment," Environment and Planning A, Pion Ltd, London, vol. 2(1), pages 23-32, January. [Downloadable!] (restricted)
  4. Linneman, Peter, 1980. "Some empirical results on the nature of the hedonic price function for the urban housing market," Journal of Urban Economics, Elsevier, vol. 8(1), pages 47-68, July. [Downloadable!] (restricted)
  5. M Dear & Ruth Fincher & Lise Currie, 1977. "Measuring the external effects of public programs," Environment and Planning A, Pion Ltd, London, vol. 9(2), pages 137-147, February. [Downloadable!] (restricted)
  6. Palmquist, Raymond B, 1984. "Estimating the Demand for the Characteristics of Housing," The Review of Economics and Statistics, MIT Press, vol. 66(3), pages 394-404, August. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Boris A. Portnov & Yakov Odish & Larissa Fleishman, 2005. "Factors Affecting Housing Modifications and Housing Pricing: A Case Study of Four Residential Neighborhoods in Haifa, Israel," Journal of Real Estate Research, American Real Estate Society, vol. 27(4), pages 371-408. [Downloadable!]
  2. Esteban Rossi-Hansberg & Pierre-Daniel Sarte & Raymond Owens III, 2008. "Housing Externalities," NBER Working Papers 14369, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Esteban Rossi-Hansberg & Pierre-Daniel G. Sarte & Raymond E. Owens, III, 2008. "Housing externalities : evidence from spatially concentrated urban revitalization programs," Working Paper 08-03, Federal Reserve Bank of Richmond. [Downloadable!]
  4. Steve Gibbons, 2001. "Paying for good neighbours? Neighbourhood deprivation and the communiy benefits of education," CEE Discussion Papers 0017, Centre for the Economics of Education, LSE. [Downloadable!]
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