Transformations of Industrial Heritage: Insights into External Effects on House Prices

Tinbergen Institute Discussion Paper 14-122/VIII

36 Pages Posted: 16 Sep 2014

See all articles by Mark van Duijn

Mark van Duijn

University of Groningen, Faculty of Spatial Sciences, Department of Economic Geography and Population Research Centre

Jan Rouwendal

VU University Amsterdam - Department of Spatial Economics; Tinbergen Institute

Richard Boersema

Colliers International - Colliers International, Amsterdam

Date Written: September 12, 2014

Abstract

Local policy makers seek ways to deal with abandoned industrial heritage in their jurisdictions. Much is demolished, but in some cases considerable investments are made to preserve the cultural aspects of industrial sites. The renewal plans are usually designed to stimulate urban renewal in the vicinity of these sites. Little seems to be known about the effectiveness of these policies and in this paper, we study whether the redevelopment of five industrial heritage sites caused positive external effects by investigating the development of house prices in nearby residential areas. We use a quasi‐experimental design by comparing quality‐adjusted house prices before the start, between the start and the completion and after the completion of the transformation. We find substantial effects of one site, which is the best-known example of renovated industrial heritage in the Netherlands, but much smaller or no effects for the other sites. We also model the decay of these effects over time and space. We find different decay effects for each case. We conclude that industrial heritage sites do not necessarily cause negative external effects. If there are negative external effects present they disappear at the start of the transformation of the industrial heritage site, suggesting anticipation effects. Also, positive external effects on house prices after the redevelopment of industrial heritage are not necessarily present. The details of the transformation project (e.g. location, size of the site, size of the investment, focus on interior or exterior investments) seem to be important determinants that may cause the existence of positive external effects.

Keywords: Industrial heritage, redevelopment, urban revitalization, external effects, hedonic prices

JEL Classification: C21, D62, H43, R0

Suggested Citation

van Duijn, Mark and Rouwendal, Jan and Boersema, Richard, Transformations of Industrial Heritage: Insights into External Effects on House Prices (September 12, 2014). Tinbergen Institute Discussion Paper 14-122/VIII, Available at SSRN: https://ssrn.com/abstract=2495411 or http://dx.doi.org/10.2139/ssrn.2495411

Mark Van Duijn (Contact Author)

University of Groningen, Faculty of Spatial Sciences, Department of Economic Geography and Population Research Centre ( email )

P.O. Box 800
Groningen, 9700 AV
Netherlands

Jan Rouwendal

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Richard Boersema

Colliers International - Colliers International, Amsterdam ( email )

Buitenveldertselaan 5
1082 VA
Amsterdam
Netherlands

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