Neighborhood Renewal: The Decision to Renovate or Tear Down
Regional Science and Urban Economics, Vol. 54, No. 1, 2015
54 Pages Posted: 12 Apr 2014 Last revised: 3 Feb 2017
Date Written: July 28, 2015
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 structural attributes for renovations, land for tear downs, 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.
Keywords: neighborhood renewal, gentrification, redevelopment, renovation, teardown
JEL Classification: R31, R11, R14, R52, R33
Suggested Citation: Suggested Citation