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Land Bank 2.0: an empirical evaluation

  • Stephan Whitaker
  • Thomas J. Fitzpatrick IV

Cuyahoga County created a land bank in 2009 explicitly intended to acquire low-value properties, mitigate blighted housing, help stabilize neighborhoods, and slow the decline of property values. This paper evaluates the effectiveness of the land bank by estimating spatially-corrected hedonic price models using sales near the land bank homes. Homes that sold within 500 feet of a property that would be acquired by the land bank in the next six months show a 3 to 5 percent discount versus observationally similar homes. Homes that sold within 500 feet of a land bank owned home sold at prices approximately 5 percent higher than similar homes. A land bank demolition appears to have a positive externality, which adds 9 percent to the value of a nearby home sale. These results are consistent through a wide variety of specifications, but they are not measured precisely enough to be statistically significant.

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File URL: https://www.clevelandfed.org/~/media/Files/Working%20Papers/wp2012/wp1230r-land-bank-2-0-an-empirical-evaluation.pdf?la=en
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Paper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 1230.

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Date of creation: 2012
Date of revision: 01 Sep 2014
Handle: RePEc:fip:fedcwp:1230
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  1. Kelejian, Harry H & Prucha, Ingmar R, 1999. "A Generalized Moments Estimator for the Autoregressive Parameter in a Spatial Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(2), pages 509-33, May.
  2. William H. Rogers & William Winter, 2009. "The Impact of Foreclosures on Neighboring Housing Sales," Journal of Real Estate Research, American Real Estate Society, vol. 31(4), pages 455-480.
  3. John Y. Campbell & Stefano Giglio & Parag Pathak, 2009. "Forced Sales and House Prices," NBER Working Papers 14866, National Bureau of Economic Research, Inc.
  4. William H. Rogers, 2010. "Declining foreclosure neighborhood effects over time," Housing Policy Debate, Taylor & Francis Journals, vol. 20(4), pages 687-706, September.
  5. David M. Drukker & Ingmar Prucha & Rafal Raciborski, 2013. "Maximum likelihood and generalized spatial two-stage least-squares estimators for a spatial-autoregressive model with spatial-autoregressive disturbances," Stata Journal, StataCorp LP, vol. 13(2), pages 221-241, June.
  6. Tammy Leonard & James Murdoch, 2009. "The neighborhood effects of foreclosure," Journal of Geographical Systems, Springer, vol. 11(4), pages 317-332, December.
  7. Daniel Hartley, 2011. "The effect of foreclosures on nearby housing prices: supply or disamenity?," Working Paper 1011, Federal Reserve Bank of Cleveland, revised 01 Sep 2014.
  8. Edward L. Glaeser & Joseph Gyourko, 2005. "Urban Decline and Durable Housing," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 345-375, April.
  9. Jeremy R. Groves & William H. Rogers, 2011. "Effectiveness of RCA Institutions to Limit Local Externalities: Using Foreclosure Data to Test Covenant Effectiveness," Land Economics, University of Wisconsin Press, vol. 87(4), pages 559-581.
  10. Stephan Whitaker & Thomas J. Fitzpatrick IV, 2012. "The impact of vacant, tax-delinquent, and foreclosed property on sales prices of neighboring homes," Working Paper 1123, Federal Reserve Bank of Cleveland.
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