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Why Don't Enterprise Zones Work? Estimates of the Extent that EZ Benefits are Capitalized into Property Values

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  • Landers, Jim

Abstract

The study examines the impact of local Enterprise Zones (EZs) on commercial and industrial property values. Currently, 43 states have established EZ programs to target development incentives to economically distressed areas. While there is a substantial body of literature analyzing the effectiveness of EZ programs, the research has yielded varied findings. The varied results of EZ programs could potentially arise as EZ property values are bid up by businesses seeking to expand or locate operations in the EZs. This would reduce amounts that these businesses would otherwise spend on capital assets or labor. A hedonic price model is estimated to determine the effect of EZ status and nearby EZ activity on property values. The empirical results imply that EZ status may, in some instances, have a positive impact on EZ property values. However, the empirical results also suggest that these potential price effects may diminish as EZs are designated in other nearby locations.

Suggested Citation

  • Landers, Jim, 2006. "Why Don't Enterprise Zones Work? Estimates of the Extent that EZ Benefits are Capitalized into Property Values," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 36(1).
  • Handle: RePEc:ags:jrapmc:132311
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    References listed on IDEAS

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    1. Paul K. Asabere & Forrest E. Huffman, 1991. "Zoning and Industrial Land Values: The Case of Philadelphia," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(2), pages 154-160.
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    Citations

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    Cited by:

    1. Roland Rathelot & Patrick Sillard, 2008. "Zones Franches Urbaines : quels effets sur l'emploi salarié et les créations d'établissements ?," Économie et Statistique, Programme National Persée, vol. 415(1), pages 81-96.
    2. Jed Kolko & David Neumark, 2010. "Do some enterprise zones create jobs?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(1), pages 5-38.
    3. Krupka, Douglas J. & Noonan, Douglas S., 2009. "Empowerment Zones, neighborhood change and owner-occupied housing," Regional Science and Urban Economics, Elsevier, vol. 39(4), pages 386-396, July.
    4. repec:crs:ecosta:es415-416e is not listed on IDEAS
    5. Neumark, David & Kolko, Jed, 2010. "Do enterprise zones create jobs? Evidence from California's enterprise zone program," Journal of Urban Economics, Elsevier, vol. 68(1), pages 1-19, July.
    6. Givord, Pauline & Rathelot, Roland & Sillard, Patrick, 2013. "Place-based tax exemptions and displacement effects: An evaluation of the Zones Franches Urbaines program," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 151-163.
    7. Hodge, Timothy R. & Komarek, Timothy M., 2016. "Capitalizing on Neighborhood Enterprise Zones: Are Detroit residents paying for the NEZ Homestead exemption?," Regional Science and Urban Economics, Elsevier, vol. 61(C), pages 18-25.
    8. repec:bap:journl:170407 is not listed on IDEAS
    9. Krupka, Douglas J. & Noonan, Douglas S., 2009. "Neighborhood Dynamics and the Housing Price Effects of Spatially Targeted Economic Development Policy," IZA Discussion Papers 4308, Institute for the Study of Labor (IZA).

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