Knocking it Down and Mixing it Up: The Impact of Public Housing Regenerations

Abstract

Partly due to their negative effects on surrounding neighborhoods, some countries have been replacing distressed public housing developments with mixed-income housing. We study the impact of such policies on local housing markets in London, U.K., where several public housing developments were demolished and rebuilt while adding market-rate units on-site. We show that these 'regenerations' increase nearby house prices and rents, consistent with strong demand effects outweighing supply effects from additional market-rate housing in the immediate vicinity. We provide suggestive evidence that these effects are driven by regenerations removing an eyesore, attracting higher-income households, and reducing nearby crime.

Keywords: public housing, mixed-income housing, house prices, rents, amenities

JEL Classification: I38, H75, R23, R31