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

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Author Info
Jan K. Brueckner ()
Stuart S. Rosenthal ()

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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, will 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. Empirical work indicates that if the influence of spatial variation in dwelling ages were eliminated, longstanding central city/suburban disparities in neighborhood economic status would be reduced by up to 50 percent. Model estimates further predict that between 2000 and 2020, central-city/suburban differences in economic status will widen somewhat in smaller cities but narrow sharply in the largest American cities as they become more gentrified.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 1579.

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Date of creation: 2005
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Handle: RePEc:ces:ceswps:_1579

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Find related papers by JEL classification:
R00 - Urban, Rural, and Regional Economics - - General - - - General
R14 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Land Use Patterns

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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. Edward L. Glaeser & Matthew E. Kahn & Jordan Rappaport, 2000. "Why Do the Poor Live in Cities?," NBER Working Papers 7636, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Edward L. Glaeser & Joseph Gyourko, 2005. "Urban Decline and Durable Housing," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 345-375, April.
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  3. Coulson, N Edward & Bond, Eric W, 1990. "A Hedonic Approach to Residential Succession," The Review of Economics and Statistics, MIT Press, vol. 72(3), pages 433-44, August. [Downloadable!] (restricted)
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  4. Brueckner, Jan K., 1980. "Residential succession and land-use dynamics in a vintage model of urban housing," Regional Science and Urban Economics, Elsevier, vol. 10(2), pages 225-240, June. [Downloadable!] (restricted)
  5. Kern, Clifford R., 1981. "Upper-income renaissance in the city: Its sources and implications for the city's future," Journal of Urban Economics, Elsevier, vol. 9(1), pages 106-124, January. [Downloadable!] (restricted)
  6. Wheaton, William C, 1977. "Income and Urban Residence: An Analysis of Consumer Demand for Location," American Economic Review, American Economic Association, vol. 67(4), pages 620-31, September. [Downloadable!] (restricted)
  7. LeRoy, Stephen F. & Sonstelie, Jon, 1983. "Paradise lost and regained: Transportation innovation, income, and residential location," Journal of Urban Economics, Elsevier, vol. 13(1), pages 67-89, January. [Downloadable!] (restricted)
  8. Brueckner, Jan K., 1981. "A dynamic model of housing production," Journal of Urban Economics, Elsevier, vol. 10(1), pages 1-14, July. [Downloadable!] (restricted)
  9. Braid, Ralph M., 1986. "The comparative statics of a filtering model of housing with two income groups," Regional Science and Urban Economics, Elsevier, vol. 16(3), pages 437-448, August. [Downloadable!] (restricted)
  10. 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. [Downloadable!] (restricted)
  11. Aaronson, Daniel, 2001. "Neighborhood Dynamics," Journal of Urban Economics, Elsevier, vol. 49(1), pages 1-31, January. [Downloadable!] (restricted)
  12. Rosenthal Stuart S. & Helsley Robert W., 1994. "Redevelopment and the Urban Land Price Gradient," Journal of Urban Economics, Elsevier, vol. 35(2), pages 182-200, March. [Downloadable!] (restricted)
  13. 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, vol. 43(1), pages 91-107, January. [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. Dennis N. Epple & Maria Marta Ferreyra, 2007. "School Finance Reform: Assessing General Equilibrium Effects," NBER Working Papers 13524, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. McKinnish, Terra & Walsh, Randall & White, T. Kirk, 2007. "Who Gentrifies Low-income Neighborhoods?," MPRA Paper 6671, University Library of Munich, Germany, revised Nov 2007. [Downloadable!]
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