Urban Renewal and Inequality: Evidence from Chicago's Public Housing Demolitions

This paper studies one of the largest spatially targeted redevelopment efforts implemented in the United States: public housing demolitions sponsored by the HOPE VI program. Focusing on Chicago, we study welfare and racial disparities in the impacts of demolitions using a structural model that features a rich set of equilibrium responses. Our results indicate that demolitions had notably heterogeneous effects where welfare decreased for low-income minority households and increased for White households. Counterfactual simulations explore how housing policy mitigates negative effects of demolitions and suggest that increased public housing site redevelopment is the most effective policy for reducing racial inequality.

Keywords: Urban Renewal, Inequality, Segregation, Endogenous Neighborhood Change

JEL Classification: R23, R28, I31

Suggested Citation: Suggested Citation

Almagro, Milena and Chyn, Eric and Stuart, Bryan, Urban Renewal and Inequality: Evidence from Chicago's Public Housing Demolitions (September, 2023). FRB of Philadelphia Working Paper No. 23-19, Available at SSRN: https://ssrn.com/abstract=4571603 or http://dx.doi.org/10.21799/frbp.wp.2023.19