City Change: The Impact of New Housing Construction on Streetscape Diversity

Abstract

Besides providing housing, new residential developments influence several features of their surroundings. While the impact of new housing on the social composition and the real estate market has been extensively studied, the effect on the diversity of consumer amenities is not well understood. In this paper, we estimate the impact of newly constructed housing on the diversity of businesses and languages displayed on the streets in Stockholm using a synthetic difference-indifference approach. The study analyses 1283 housing projects completed between 2007 and 2020 and examines individual business data reported to the city to measure changes in business diversity. Further, street view images are used to assess changes in the languages represented on physical objects such as storefronts and commercial advertisements. The findings show that business and language diversity increases following the construction of new housing. However, the increase in business diversity is primarily observed in low-income neighbourhoods, whereas language diversity increases in both low and high-income neighbourhoods. Our results highlight the spill-over effects of new housing projects on the diversity of languages and amenities in neighbourhoods.

Keywords: Housing, Business Diversity, Language Diversity, Gentrification, Stockholm, Spatial Spillovers