Time-Varying and Land Use-Induced Spillover Effects of Urban Redevelopment: Evidence from Hong Kong

Abstract

This paper investigates the time-varying and land use-induced spillover effects of urban redevelopment, which provides a microscope to understand the welfare implications regarding both temporal dynamics and land use changes under urban transformation. Based on the redevelopment project and housing transaction data in Hong Kong from 2005 to 2020, we find significant positive spillover effects upon the redevelopment announcement, with a diminishing magnitude as the redevelopment project proceeds. Meanwhile, we find heterogeneous spillover effects associated with different functional land use changes of redevelopment projects. The direction and extent of these externalities depend on the tradeoff between the changes in local amenities and changes in local housing market competitiveness.

Keywords: urban redevelopment, time-varying spillover effect, land use-induced spillover effect, land use changes