IDEAS home Printed from https://ideas.repec.org/a/eee/regeco/v57y2016icp91-107.html
   My bibliography  Save this article

Redevelopment of industrial heritage: Insights into external effects on house prices

Author

Listed:
  • van Duijn, Mark
  • Rouwendal, Jan
  • Boersema, Richard

Abstract

Local policy makers seek ways to deal with abandoned industrial heritage in their jurisdictions. Many are demolished, but in some cases considerable investments are made to preserve the cultural aspects of industrial sites. The renewal plans are usually designed to stimulate urban renewal in the vicinity of these sites. Little seems to be known about the effectiveness of these policies. In this paper, we study whether the redevelopment of 36 industrial heritage sites in The Netherlands caused positive external effects by investigating the development of house prices in nearby residential areas. We use a difference-in-difference design by comparing quality-adjusted house prices in a predefined target and control area before the start, between the start and the completion and after the completion of the redevelopment. We also model the spatial and temporal dimensions of these external effects. We find that these dimensions matter substantially. We find that negative externalities on house prices before the start completely disappear after the start of the redevelopment of industrial heritage sites. We also find evidence for positive and local effects on house prices after the completion, but this result disappears when we remove the projects located in the largest cities.

Suggested Citation

  • van Duijn, Mark & Rouwendal, Jan & Boersema, Richard, 2016. "Redevelopment of industrial heritage: Insights into external effects on house prices," Regional Science and Urban Economics, Elsevier, vol. 57(C), pages 91-107.
  • Handle: RePEc:eee:regeco:v:57:y:2016:i:c:p:91-107
    DOI: 10.1016/j.regsciurbeco.2016.02.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0166046216000065
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Edward L. Glaeser, Jed Kolko, and Albert Saiz, 2001. "Consumer city," Journal of Economic Geography, Oxford University Press, vol. 1(1), pages 27-50, January.
    2. Leah Brooks & Justin Phillips, 2007. "Inside The Gift Horse'S Mouth: City Spending, Political Instituions And The Community Development Block Grant Program," Departmental Working Papers 2007-09, McGill University, Department of Economics.
    3. Friso de Vor & Henri de Groot, 2011. "The Impact of Industrial Sites on Residential Property Values: A Hedonic Pricing Analysis from the Netherlands," Regional Studies, Taylor & Francis Journals, vol. 45(5), pages 609-623.
    4. Carlino, Gerald A. & Saiz, Albert, 2008. "City Beautiful," IZA Discussion Papers 3778, Institute for the Study of Labor (IZA).
    5. Mark Van Duijn & Jan Rouwendal & Richard Boersema, 2014. "Transformations of industrial heritage: Insights into external effects on house prices," ERES eres2014_59, European Real Estate Society (ERES).
    6. Linn, Joshua, 2013. "The effect of voluntary brownfields programs on nearby property values: Evidence from Illinois," Journal of Urban Economics, Elsevier, vol. 78(C), pages 1-18.
    7. Esteban Rossi-Hansberg & Pierre-Daniel Sarte & Raymond Owens, 2010. "Housing Externalities," Journal of Political Economy, University of Chicago Press, vol. 118(3), pages 485-535, June.
    8. Lucija Muehlenbachs & Elisheba Spiller & Christopher Timmins, 2015. "The Housing Market Impacts of Shale Gas Development," American Economic Review, American Economic Association, vol. 105(12), pages 3633-3659, December.
    9. Gabriel M. Ahlfeldt & Kristoffer Moeller & Sevrin Waights & Nicolai Wendland, 2013. "Game of Zones: The Economics of Conservation Areas," SERC Discussion Papers 0143, Spatial Economics Research Centre, LSE.
    10. Hans R.A. Koster & Jan Rouwendal, 2015. "Historic Amenities and Housing Externalities: Evidence from The Netherlands," Tinbergen Institute Discussion Papers 15-023/VIII, Tinbergen Institute.
    11. Carlino, Gerald & Coulson, N. Edward, 2004. "Compensating differentials and the social benefits of the NFL," Journal of Urban Economics, Elsevier, vol. 56(1), pages 25-50, July.
    12. 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.
    13. Gabriel M. Ahlfeldt & Wolfgang Maennig & Felix J. Richter, 2013. "Urban Renewal after the Berlin Wall," Working Papers 049, Chair for Economic Policy, University of Hamburg.
    14. Jan K. Brueckner & Stuart S. Rosenthal, 2009. "Gentrification and Neighborhood Housing Cycles: Will America's Future Downtowns Be Rich?," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 725-743, November.
    15. Ahlfeldt, Gabriel M., 2011. "Blessing or curse? Appreciation, amenities and resistance to urban renewal," Regional Science and Urban Economics, Elsevier, vol. 41(1), pages 32-45, January.
    16. Anita Ratcliffe & Stephanie von Hinke Kessler Scholder, 2015. "The London Bombings And Racial Prejudice: Evidence From The Housing And Labor Market," Economic Inquiry, Western Economic Association International, vol. 53(1), pages 276-293, January.
    17. repec:arz:wpaper:eres2014-59 is not listed on IDEAS
    18. Abadie, Alberto & Imbens, Guido W., 2011. "Bias-Corrected Matching Estimators for Average Treatment Effects," Journal of Business & Economic Statistics, American Statistical Association, vol. 29(1), pages 1-11.
    19. Abbott, Joshua K. & Allen Klaiber, H., 2013. "The value of water as an urban club good: A matching approach to community-provided lakes," Journal of Environmental Economics and Management, Elsevier, vol. 65(2), pages 208-224.
    20. Ioannides, Yannis M., 2003. "Interactive property valuations," Journal of Urban Economics, Elsevier, vol. 53(1), pages 145-170, January.
    21. Alberto Abadie & Guido W. Imbens, 2002. "Simple and Bias-Corrected Matching Estimators for Average Treatment Effects," NBER Technical Working Papers 0283, National Bureau of Economic Research, Inc.
    22. 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 433-444, August.
    23. Rosenthal, Stuart S., 2008. "Old homes, externalities, and poor neighborhoods. A model of urban decline and renewal," Journal of Urban Economics, Elsevier, vol. 63(3), pages 816-840, May.
    24. Alberto Dávila & Marie Mora, 2005. "Changes in the earnings of Arab men in the US between 2000 and 2002," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(4), pages 587-601, November.
    25. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    26. Cheshire, Paul & Sheppard, Stephen, 1995. "On the Price of Land and the Value of Amenities," Economica, London School of Economics and Political Science, vol. 62(246), pages 247-267, May.
    27. Harding, John P. & Rosenthal, Stuart S. & Sirmans, C.F., 2007. "Depreciation of housing capital, maintenance, and house price inflation: Estimates from a repeat sales model," Journal of Urban Economics, Elsevier, vol. 61(2), pages 193-217, March.
    28. Brent C Smith, 2004. "Economic Depreciation of Residential Real Estate: Microlevel Space and Time Analysis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 32(1), pages 161-180, March.
    29. Daniel P. McMillen & John F. McDonald, 2002. "Land Values In A Newly Zoned City," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 62-72, February.
    30. Schwartz, Amy Ellen & Ellen, Ingrid Gould & Voicu, Ioan & Schill, Michael H., 2006. "The external effects of place-based subsidized housing," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 679-707, November.
    31. Chen, Yong & Rosenthal, Stuart S., 2008. "Local amenities and life-cycle migration: Do people move for jobs or fun?," Journal of Urban Economics, Elsevier, vol. 64(3), pages 519-537, November.
    32. Alberto Abadie & Guido W. Imbens, 2006. "Large Sample Properties of Matching Estimators for Average Treatment Effects," Econometrica, Econometric Society, vol. 74(1), pages 235-267, January.
    33. Hans Koster & Jos Van Ommeren, 2013. "Spatial Externalities and Place-Based Policies: Evidence from the Netherlands," ERSA conference papers ersa13p848, European Regional Science Association.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Industrial heritage; Redevelopment; Urban revitalization; External effects; Hedonic prices;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:regeco:v:57:y:2016:i:c:p:91-107. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/regec .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.