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The economics of conservation area designation

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  • Gabriel Ahlfeldt
  • Kristoffer Moeller
  • Sevrin Waights
  • Nicolai Wendland

Abstract

Provided that there are positive external benefits attached to the historic character of buildings, owners of properties in designated conservation areas benefit from a reduction in uncertainty regarding the future of their area. At the same time, the restrictions put in place to ensure the preservation of the historic character limit the degree to which properties can be altered and thus impose a cost to their owners. We test a simple theory of the designation process in which we postulate that the optimal level of designation is chosen so to Pareto-maximize the welfare of local owners. The implication of the model is that a) an increase in preferences for historic character should increase the likelihood of a designation and b) new designations at the margin should not be associated with significant house price capitalization effects. Our empirical results are in line with these expectations.

Suggested Citation

  • Gabriel Ahlfeldt & Kristoffer Moeller & Sevrin Waights & Nicolai Wendland, 2013. "The economics of conservation area designation," ERSA conference papers ersa13p87, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa13p87
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    Cited by:

    1. Felix Richter, 2014. "Winner Picking in Urban Revitalization Policies: Empirical Evidence from Berlin," ERSA conference papers ersa14p1424, European Regional Science Association.
    2. Mark van Duijn & Jan Rouwendal & Richard Boersema, 2014. "Transformations of Industrial Heritage: Insights into External Effects on House Prices," Tinbergen Institute Discussion Papers 14-122/VIII, Tinbergen Institute.
    3. Kristoffer Moeller, 2013. "Culturally clustered or in the cloud? Location of internet start-ups in Berlin," ERSA conference papers ersa13p455, European Regional Science Association.
    4. Gabriel M. Ahlfeldt & Wolfgang Maennig & Felix J. Richter, 2017. "Zoning in reunified Berlin," Working Papers 059, Chair for Economic Policy, University of Hamburg.
    5. 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.
    6. ., 2014. "Urban policies," Chapters, in: Urban Economics and Urban Policy, chapter 8, pages 185-218, Edward Elgar Publishing.

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    More about this item

    Keywords

    Heritage; Hedonic Modelling; Difference-in-Difference; Gentrification; England; Value;
    All these keywords.

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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