Do New Sports Facilities Revitalize Urban Neighborhoods? Evidence from Residential Mortgage Applications

Using data from 56 professional sports facilities opened between 1995 and 2008, we find what at first appears to be a substantial neighborhood revitalization effect: the opening of a facility is associated with an increase in mortgage applications to purchase homes located in the neighborhood of about 20%, compared to those in the rest of the metropolitan area. A closer examination shows that much of the differential is due to the non-randomness of facility location. The new facilities locate in poor urban areas, which grew faster over the sample period even if they were not near a new facility, perhaps because of increasing access to mortgage credit by low-income urban populations. Based on a series of regressions using census-tract level data, we find that conditioning on local income and poverty rates, under which poorer census tracts grow faster regardless of their locations, reduces the “revitalization” effect by more than a half, suggesting that characteristics of locations drive much the increase on mortgage applications associated with new sports facilities.