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Neighborhood renewal: The decision to renovate or tear down

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  • Munneke, Henry J.
  • Womack, Kiplan S.

Abstract

Renewal at the neighborhood level is the culmination of redevelopment decisions made at the property level. This study examines the decisions of whether to partially redevelop (renovate) or fully redevelop (tear down) existing improvements. Results from the study reveal the primary determinants of the decision, particularly highlighting the importance of structural attributes for renovations, land for teardowns, and location and prior redevelopment activity for both. Additionally, as a test of a proposition from prior studies, major renovations are found to be equivalent to teardown sales, where the property is valued only for the underlying land. The level of expected renovations is also shown to decrease the selling price of properties requiring renovations.

Suggested Citation

  • Munneke, Henry J. & Womack, Kiplan S., 2015. "Neighborhood renewal: The decision to renovate or tear down," Regional Science and Urban Economics, Elsevier, vol. 54(C), pages 99-115.
    • Handle: RePEc:eee:regeco:v:54:y:2015:i:c:p:99-115
    DOI: 10.1016/j.regsciurbeco.2015.08.001
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    1. Minneapolis 2040: The most wonderful plan of the year
      by Jenny Schuetz in The Avenue on 2018-12-12 15:42:34

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    Cited by:

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    4. Jenny Schuetz, 2020. "Teardowns, popups, and renovations: How does housing supply change?," Journal of Regional Science, Wiley Blackwell, vol. 60(3), pages 459-480, June.
    5. Lai, Yani & Tang, Bosin & Chen, Xiangsheng & Zheng, Xian, 2021. "Spatial determinants of land redevelopment in the urban renewal processes in Shenzhen, China," Land Use Policy, Elsevier, vol. 103(C).
    6. Yani Lai & Lin Jiang & Xiaoxiao Xu, 2021. "Exploring Spatio-Temporal Patterns of Urban Village Redevelopment: The Case of Shenzhen, China," Land, MDPI, vol. 10(9), pages 1-26, September.
    7. Lindenthal, Thies & Eichholtz, Piet & Geltner, David, 2017. "Land assembly in Amsterdam, 1832–2015," Regional Science and Urban Economics, Elsevier, vol. 64(C), pages 57-67.
    8. McMillen, Daniel & Zabel, Jeffrey, 2022. "Special issue on land valuation: Introduction," Journal of Housing Economics, Elsevier, vol. 58(PB).
    9. Clapp, John M. & Lindenthal, Thies, 2022. "Urban land valuation with bundled good and land residual assumptions," Journal of Housing Economics, Elsevier, vol. 58(PA).
    10. Sören Gröbel, 2018. "Regional heterogeneity in age-related housing depreciation rates [Regionale Heterogenität altersbedingter Wertminderungen von Wohnimmobilien]," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 38(2), pages 219-254, October.
    11. Chia, Liu Ee & Sing, Tien Foo, 2023. "Redevelopment values in multi-family properties: Evidence from en bloc sales in Singapore," Journal of Housing Economics, Elsevier, vol. 60(C).
    12. John M. Clapp & Jeffrey P. Cohen & Thies Lindenthal, 2023. "Are Estimates of Rapid Growth in Urban Land Values an Artifact of the Land Residual Model?," The Journal of Real Estate Finance and Economics, Springer, vol. 66(2), pages 373-421, February.
    13. Dubé, Jean & Desaulniers, Sarah & Bédard, Louis-Philippe & Binette, Antoine & Leblanc, Emmanuelle, 2018. "Urban residential reconversion through demolition: A land use model based on administrative spatial micro-data," Land Use Policy, Elsevier, vol. 76(C), pages 686-696.
    14. Cao, Kexin & Deng, Yu & Wang, Wenxue & Liu, Shenghe, 2023. "The spatial heterogeneity and dynamics of land redevelopment: Evidence from 287 Chinese cities," Land Use Policy, Elsevier, vol. 132(C).
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    More about this item

    Keywords

    Neighborhood renewal; Redevelopment; Renovation; Tear down; Gentrification;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • 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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