Moving Beyond Cleanup: Identifying the Crucibles of Environmental Gentrification

53 Pages Posted: 1 Jun 2007

See all articles by H. Spencer Banzhaf

H. Spencer Banzhaf

Georgia State University - Department of Economics; PERC - Property and Environment Research Center; National Bureau of Economic Research (NBER)

Eleanor McCormick

Resources for the Future

Date Written: December 2006

Abstract

This paper reviews the distributional impacts associated with environmental gentrification following the cleanup and reuse of LULUs. By making a neighborhood more attractive, cleanup and reuse of LULUs may drive up local real estate prices. Renters in the neighborhood would have to pay higher rents. Moreover, existing residents may not value the removal of the disamenity as much as other households, creating a mismatch between their priorities and the new character of the neighborhood. Thus, even if they do not move, existing residents, especially renters, may be harmed by the gentrification effects of cleanup.

We find that even a simple economic model does not yield clear predictions on neighborhood effects following cleanup, except for the initial effect of rising housing values. In the empirical literature, we actually find conflicting evidence of rising real estate prices following cleanup of LULUs. We find somewhat stronger evidence for increased housing density and increasing incomes, but no evidence for racial impacts. Our review also uncovers a variety of factors that are likely to minimize the likelihood of gentrification or temper its adverse consequences.

Suggested Citation

Banzhaf, H. Spencer and McCormick, Eleanor, Moving Beyond Cleanup: Identifying the Crucibles of Environmental Gentrification (December 2006). Andrew Young School of Policy Studies Research Paper Series No. 07-29. Available at SSRN: https://ssrn.com/abstract=990074 or http://dx.doi.org/10.2139/ssrn.990074

H. Spencer Banzhaf (Contact Author)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-413-0252 (Phone)

HOME PAGE: http://www2.gsu.edu/~prchsb/

PERC - Property and Environment Research Center

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
United States

Eleanor McCormick

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States
202-328-5021 (Phone)

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