Abstract
The paper adopts a difference-in-difference method to investigate the impacts of government-initiated neighborhood renewal programs on the values of aged housing properties in Hangzhou, China. Three empirical findings are obtained. First, the renewal raised living utility values and thus rents of the renewed properties. Second, the improvement in living utility value is partially offset by a reduction in the option value of housing redevelopment, because government planning policy specifies that the renewed neighborhoods will not be redeveloped at least in the next 5–10 years. Third, housing prices in neighborhoods farther away from scenic spots, which were generally lower, even dropped after the renewal. This evidences the complementarity between housing conditions and external environment, i.e., the renewal raises housing values less if the external environment is more inferior. These findings have important policy implications for urban renewals.
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Notes
The neighborhood renewal in this paper refers specifically to necessary renovations for aged buildings, rather than complete redevelopment.
Please refer to Section A1 of the online appendix for the details of the institutional background.
CREIS database, i.e., China Real Estate Index System, is one of the most authoritative real estate databases in China. It was initiated by the Research Institute of the State Council and China Real Estate Development Group in 1994.
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Funding
This work was supported by National Natural Science Foundation of China, awarded to Dr. Yanjiang Zhang, Grant No. 72004203; National Natural Science Foundation of China, awarded to Dr. Xiaofen Yu, Grant No.72274176; Fundamental Research Funds for the Provincial Universities of Zhejiang, Grant No. GB201901002.
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Dr. XY contributes to the research framework, improves the structure of the paper, and provides guidance on research methods; Mrs HF conducts the empirical analysis and drafts up the paper; Dr. SY verifies the overall reproducibility of the empirical results and improves the writing of the paper; Mr. HY cleans the data; Dr. YZ raises the research idea, frames up the research framework and methodology.
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Yu, X., Fan, H., Yang, S. et al. Neighborhood renewal does not raise values of all aged residential properties: case from Hangzhou, China. J Hous and the Built Environ 39, 161–178 (2024). https://doi.org/10.1007/s10901-023-10072-8
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DOI: https://doi.org/10.1007/s10901-023-10072-8