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Is Urban Decay Bad? Is Urban Revitalization Bad Too?

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  • Jacob L. Vigdor

Abstract

Many observers argue that urban revitalization harms the poor, primarily by raising rents. Others argue that urban decline harms the poor by reducing job opportunities, the quality of local public services, and other neighborhood amenities. While both decay and revitalization can have negative effects if moving costs are sufficiently high, in general the impact of neighborhood change on utility depends on the strength of price responses to neighborhood quality changes. Data from the American Housing Survey are used to estimate a discrete choice model identifying households' willingness-to-pay for neighborhood quality. These willingness-to-pay estimates are then compared to the actual price changes that accompany observed changes in neighborhood quality. The results suggest that price increases associated with revitalization are smaller than most households' willingness to pay for neighborhood improvements. The results imply that, in general, neighborhood revitalization is more favorable than neighborhood decline.

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  • Jacob L. Vigdor, 2007. "Is Urban Decay Bad? Is Urban Revitalization Bad Too?," NBER Working Papers 12955, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:12955
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    Cited by:

    1. Fernando Borraz & Felipe Carozzi & Nicolás González-Pampillón & Leandro Zipitría, 2021. "Local Retail Prices, Product Varieties and Neighborhood Change," Documentos de Trabajo (working papers) 0821, Department of Economics - dECON.
    2. Anand Sahasranaman & Henrik Jeldtoft Jensen, 2017. "Cooperative dynamics of neighborhood economic status in cities," PLOS ONE, Public Library of Science, vol. 12(8), pages 1-15, August.
    3. Rosenthal, Stuart S. & Ross, Stephen L., 2015. "Change and Persistence in the Economic Status of Neighborhoods and Cities," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1047-1120, Elsevier.
    4. Sevrin Waights, 2018. "Does gentrification displace poor households? An 'identification-via-interaction' approach," CEP Discussion Papers dp1540, Centre for Economic Performance, LSE.
    5. Leah Platt Boustan & Devin Bunten & Owen Hearey, 2013. "Urbanization in the United States, 1800-2000," Working Papers 2013-7, Princeton University. Economics Department..
    6. Ingrid Gould Ellen & Keren Mertens Horn & Katherine M. O’Regan, 2013. "Why Do Higher-income Households Choose Low-income Neighbourhoods? Pioneering or Thrift?," Urban Studies, Urban Studies Journal Limited, vol. 50(12), pages 2478-2495, September.
    7. Atuesta, Laura H. & Hewings, Geoffrey J.D., 2019. "Housing appreciation patterns in low-income neighborhoods: Exploring gentrification in Chicago," Journal of Housing Economics, Elsevier, vol. 44(C), pages 35-47.
    8. Valeria Saiu, 2020. "Evaluating Outwards Regeneration Effects (OREs) in Neighborhood-Based Projects: A Reversal of Perspective and the Proposal for a New Tool," Sustainability, MDPI, vol. 12(24), pages 1-16, December.
    9. Tuukka Saarimaa & Mika Kortelainen, 2012. "Do Homeowners Benefit the Neighborhood? Evidence from Semiparametric Hedonic Regressions," ERSA conference papers ersa12p472, European Regional Science Association.
    10. Germán Gieczewski, 2021. "Policy Persistence and Drift in Organizations," Econometrica, Econometric Society, vol. 89(1), pages 251-279, January.
    11. Musharraf Cyan & Michael Price & Mark Rider, 2017. "Peshawar Uplift: The Effect of Urban Development on Citizens’ Perceptions," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1709, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    12. William Sander & William A. Testa, 2009. "Education and Household Location in Chicago," Growth and Change, Wiley Blackwell, vol. 40(1), pages 116-139, March.
    13. Glaeser, Edward L. & Luca, Michael & Moszkowski, Erica, 2023. "Gentrification and retail churn: Theory and evidence," Regional Science and Urban Economics, Elsevier, vol. 100(C).

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    More about this item

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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