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Preserving history or restricting development? The heterogeneous effects of historic districts on local housing markets in New York City

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  • Been, Vicki
  • Ellen, Ingrid Gould
  • Gedal, Michael
  • Glaeser, Edward
  • McCabe, Brian J.

Abstract

Since Brooklyn Heights was designated as New York City's first landmarked neighborhood in 1965, the Landmarks Preservation Commission has designated 120 historic neighborhoods in the city. This paper develops a theory in which landmarking has heterogeneous impacts across neighborhoods and exploits variation in the timing of historic district designations in New York City to identify the effects of preservation policies on residential property markets. We combine data on residential transactions during the 35-year period between 1974 and 2009 with data from the Landmarks Preservation Commission on the location of the city's historic districts and the timing of the designations. Consistent with theory, properties just outside the boundaries of districts increase in value after designation. Further, designation raises property values within historic districts, but only outside of Manhattan. As predicted, impacts are more positive in areas where the value of the option to build unrestricted is lower. Impacts also appear to be more positive in districts that are more aesthetically appealing.

Suggested Citation

  • Been, Vicki & Ellen, Ingrid Gould & Gedal, Michael & Glaeser, Edward & McCabe, Brian J., 2016. "Preserving history or restricting development? The heterogeneous effects of historic districts on local housing markets in New York City," Journal of Urban Economics, Elsevier, vol. 92(C), pages 16-30.
    • Handle: RePEc:eee:juecon:v:92:y:2016:i:c:p:16-30
    DOI: 10.1016/j.jue.2015.12.002
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    More about this item

    Keywords

    Historic districts; Housing; Option value;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

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