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Gentrification and Neighborhood Housing Cycles: Will America's Future Downtowns Be Rich?

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  • Jan K. Brueckner

    (University of California, Irvine)

  • Stuart S. Rosenthal

    (Syracuse University)

Abstract

This paper identifies a new factor, the age of the housing stock, that affects where high- and low-income neighborhoods are located in U.S. cities. High-income households, driven by a high demand for housing services, tend to locate in areas of the city where the housing stock is relatively young. Because cities develop and redevelop from the center outward over time, the location of these neighborhoods varies over the city's history. The model predicts a suburban location for the rich in an initial period, when young dwellings are found only in the suburbs, while predicting eventual gentrification once central redevelopment creates a young downtown housing stock. Controlling for other determinants of where the poor live (e.g., proximity to amenities and public transit), empirical work indicates that if the influence of spatial variation in dwelling ages were eliminated, central-city/suburban disparities in neighborhood economic status would be reduced by up to 10 percentage points. Model estimates further predict that between 2000 and 2020, central-city/suburban differences in economic status will narrow in cities of all sizes, and especially in the larger metropolitan areas as American cities become more gentrified. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 91 (2009)
Issue (Month): 4 (November)
Pages: 725-743

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Handle: RePEc:tpr:restat:v:91:y:2009:i:4:p:725-743

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References

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  1. Edward L. Glaeser & Joseph Gyourko, 2001. "Urban Decline and Durable Housing," NBER Working Papers 8598, National Bureau of Economic Research, Inc.
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  4. Brueckner, Jan K. & Thisse, Jacques-Francois & Zenou, Yves, 1999. "Why is central Paris rich and downtown Detroit poor?: An amenity-based theory," European Economic Review, Elsevier, Elsevier, vol. 43(1), pages 91-107, January.
  5. Brueckner, Jan K., 1981. "A dynamic model of housing production," Journal of Urban Economics, Elsevier, vol. 10(1), pages 1-14, July.
  6. Aaronson, Daniel, 2001. "Neighborhood Dynamics," Journal of Urban Economics, Elsevier, vol. 49(1), pages 1-31, January.
  7. Edward L. Glaeser & Matthew E. Kahn & Jordan Rappaport, 2000. "Why Do The Poor Live In Cities?," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1891, Harvard - Institute of Economic Research.
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  9. Wheaton, William C, 1977. "Income and Urban Residence: An Analysis of Consumer Demand for Location," American Economic Review, American Economic Association, American Economic Association, vol. 67(4), pages 620-31, September.
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  12. Brueckner, Jan K., 1980. "Residential succession and land-use dynamics in a vintage model of urban housing," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 10(2), pages 225-240, June.
  13. Braid, Ralph M., 2001. "Spatial Growth and Redevelopment with Perfect Foresight and Durable Housing," Journal of Urban Economics, Elsevier, vol. 49(3), pages 425-452, May.
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Cited by:
  1. Vigdor, Jacob L., 2010. "Is urban decay bad? Is urban revitalization bad too?," Journal of Urban Economics, Elsevier, vol. 68(3), pages 277-289, November.
  2. Gabriel M. Ahlfeldt & Wolfgang Maennig & Felix J. Richter, 2013. "Urban Renewal after the Berlin Wall," Working Papers, Chair for Economic Policy, University of Hamburg 049, Chair for Economic Policy, University of Hamburg.
  3. Leah Platt Boustan & Devin Bunten & Owen Hearey, 2013. "Urbanization in the United States, 1800-2000," NBER Working Papers 19041, National Bureau of Economic Research, Inc.
  4. Ellickson, Paul B. & Grieco, Paul L.E., 2013. "Wal-Mart and the geography of grocery retailing," Journal of Urban Economics, Elsevier, vol. 75(C), pages 1-14.
  5. Gilles Duranton & Diego Puga, 2013. "The Growth Of Cities," Working Papers, CEMFI wp2013_1308, CEMFI.
  6. Meltzer, Rachel, 2012. "Understanding Business Improvement District formation: An analysis of neighborhoods and boundaries," Journal of Urban Economics, Elsevier, vol. 71(1), pages 66-78.
  7. Gabriel Ahlfeldt, 2010. "Blessing or Curse? Appreciation, Amenities and Resistance around the Berlin "Mediaspree"," Working Papers, Chair for Economic Policy, University of Hamburg 032, Chair for Economic Policy, University of Hamburg.
  8. Laudo M Ogura, 2014. "What drove gentrification in Chicago community areas in the 2000s?," Economics Bulletin, AccessEcon, vol. 34(2), pages 1045-1054.
  9. Schuetz, Jenny & Kolko, Jed & Meltzer, Rachel, 2012. "Are poor neighborhoods “retail deserts”?," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 42(1-2), pages 269-285.
  10. Dennis N. Epple & Maria Marta Ferreyra, 2007. "School Finance Reform: Assessing General Equilibrium Effects," NBER Working Papers 13524, National Bureau of Economic Research, Inc.
  11. Eriksen, Michael D. & Rosenthal, Stuart S., 2010. "Crowd out effects of place-based subsidized rental housing: New evidence from the LIHTC program," Journal of Public Economics, Elsevier, Elsevier, vol. 94(11-12), pages 953-966, December.
  12. Hans R. A. Koster & Piet Rietveld & Jos Van Ommeren, 2013. "Historic Amenities, Income and Sorting of Households," SERC Discussion Papers, Spatial Economics Research Centre, LSE 0124, Spatial Economics Research Centre, LSE.
  13. Christian A. L. Hilber & Jan Rouwendal & Wouter Vermeulen, 2014. "Local Economic Conditions and the Nature of New Housing Supply," SERC Discussion Papers, Spatial Economics Research Centre, LSE 0164, Spatial Economics Research Centre, LSE.
  14. Jones, David J., 2012. "Primary prevention and health outcomes: Treatment of residential lead-based paint hazards and the prevalence of childhood lead poisoning," Journal of Urban Economics, Elsevier, vol. 71(1), pages 151-164.
  15. Larson, William & Liu, Feng & Yezer, Anthony, 2012. "Energy footprint of the city: Effects of urban land use and transportation policies," Journal of Urban Economics, Elsevier, vol. 72(2), pages 147-159.
  16. William Sander & William Testa, 2013. "Parent's Education , School-Age Children, and Household Location in American Cities," ERSA conference papers, European Regional Science Association ersa13p54, European Regional Science Association.
  17. Epple, Dennis & Ferreyra, Maria Marta, 2008. "School finance reform: Assessing general equilibrium effects," Journal of Public Economics, Elsevier, Elsevier, vol. 92(5-6), pages 1326-1351, June.

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