Preserving History or Hindering Growth? The Heterogeneous Effects of Historic Districts on Local Housing Markets in New York City

59 Pages Posted: 8 Sep 2014

See all articles by Vicki Been

Vicki Been

New York University School of Law

Ingrid Gould Ellen

New York University (NYU) - Robert F. Wagner Graduate School of Public Service

Michael Gedal

Federal Reserve Banks - Federal Reserve Bank of New York

Edward L. Glaeser

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

Brian McCabe

Georgetown University

Date Written: September 2014

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 of 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 an extensive dataset of 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. Designation raises property values within historic districts, but only outside of Manhattan. In areas where the value of the option to build unrestricted is higher, designation has a less positive effect on property values within the district. Consistent with theory, properties just outside the boundaries of districts increase in value after designation. There is also a modest reduction in new construction in districts after designation.

Suggested Citation

Been, Vicki and Ellen, Ingrid Gould and Gedal, Michael and Glaeser, Edward L. and McCabe, Brian, Preserving History or Hindering Growth? The Heterogeneous Effects of Historic Districts on Local Housing Markets in New York City (September 2014). NBER Working Paper No. w20446. Available at SSRN: https://ssrn.com/abstract=2492958

Vicki Been (Contact Author)

New York University School of Law ( email )

40 Washington Square South
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Ingrid Gould Ellen

New York University (NYU) - Robert F. Wagner Graduate School of Public Service ( email )

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Michael Gedal

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

Edward L. Glaeser

Harvard University - Department of Economics ( email )

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Cambridge, MA 02138
United States
617-496-2150 (Phone)
617-496-1722 (Fax)

Brookings Institution

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National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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Brian McCabe

Georgetown University ( email )

Washington, DC 20057
United States

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