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Urban Renewal after the Berlin Wall

Author Info

  • Gabriel M. Ahfeldt
  • Wolfgang Maennig
  • Felix J. Richter

Abstract

Urban renewal areas are popular but empirically understudied spatial planning instruments designed to prevent urban decline and induce renewal. We use a quasi-experimental research design to study the effects of 22 renewal areas implemented in Berlin, Germany, to increase housing and living quality in the aftermath of the city's division during the Cold War period. Our results suggest that the policy has helped reduce (increase) the number of buildings in poor (good) condition by 25% (10%). Property prices increased at an annual rate of 0.4-1.7% according to our preferred estimates. Evidence is weak at best, however, for positive housing externalities. More generally, our findings indicate that the efficiency of program evaluations for place based -policies using quasi-experimental methods increases with the number of targeted areas and areas that provide the counterfactual.

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Paper provided by Spatial Economics Research Centre, LSE in its series SERC Discussion Papers with number 0151.

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Date of creation: Dec 2013
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Handle: RePEc:cep:sercdp:0151
Contact details of provider: Web page: http://www.spatialeconomics.ac.uk/SERC/publications/default.asp

Keywords: Urban; renewal; revitalization; redevelopment; hedonic regression; quasi-experiment;

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Find related papers by JEL classification:
  • D62 - Microeconomics - - Welfare Economics - - - Externalities
  • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
  • 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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Cited by:

  1. Richter, Felix Julius, 2015. "Winner Picking in Urban Revitalization Policies: Empirical Evidence from Berlin," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112913, Verein für Socialpolitik / German Economic Association.
  2. 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.
  3. 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).
  4. Kristoffer Moeller, 2013. "Culturally clustered or in the cloud? Location of internet start-ups in Berlin," ERSA conference papers ersa13p455, European Regional Science Association.
  5. Maximilian von Ehrlich & Tobias Seidel, 2015. "The persistent effects of place-based policy: Evidence from the West-German Zonenrandgebiet," Diskussionsschriften dp1506, Universitaet Bern, Departement Volkswirtschaft.

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