Housing Upgrading in Urban Redevelopment
Posted: 24 Aug 2016 Last revised: 21 Aug 2019
Date Written: August 20, 2016
This paper studies the effect of adding space to existing housing apartments on housing price and the probability that owners will sell their apartment (flat). This space adding is part of a large scale urban renewal and upgrading policy in Singapore, and is carried out only if sufficient residents vote in favour of space adding. Using administrative data on unit transactions and a difference-in-differences strategy, we find that adding 6m2 of space to a flat increases the resale price of a flat by 7.62% and reduces the probability that the flat will be sold. In addition, we find that the resale price of flats with additional space starts rising about 40 months after residents vote to proceed with space adding. These results can be interpreted as the causal impact of space adding, as we control for unobserved heterogeneity by adding block (building) fixed effects and restricting our sample to narrow margins around the voting cut-off for space adding to proceed.
Keywords: upgrading, urban renewal, urban redevelopment, policy evaluation
JEL Classification: D04, R21, R28
Suggested Citation: Suggested Citation