Housing Upgrading in Urban Redevelopment

Posted: 24 Aug 2016 Last revised: 21 Aug 2019

See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

Yanying Chen

School of Economics, Singapore Management University

Jing Li

Singapore Management University

Yi Jin Tan

School of Economics, Singapore Management University

Date Written: August 20, 2016

Abstract

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

Agarwal, Sumit and Chen, Yanying and Li, Jing and Tan, Yi Jin, Housing Upgrading in Urban Redevelopment (August 20, 2016). Georgetown McDonough School of Business Research Paper No. 2828541. Available at SSRN: https://ssrn.com/abstract=2828541 or http://dx.doi.org/10.2139/ssrn.2828541

Sumit Agarwal

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
Singapore
8118 9025 (Phone)

HOME PAGE: http://www.ushakrisna.com

Yanying Chen

School of Economics, Singapore Management University ( email )

90 Stamford Road
Singapore, 178903
Singapore

Jing Li (Contact Author)

Singapore Management University ( email )

90 Stamford Road
178903
Singapore

HOME PAGE: http://www.mysmu.edu/faculty/lijing/

Yi Jin Tan

School of Economics, Singapore Management University ( email )

90 Stamford Road
Singapore, Singapore 178903
Singapore

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