Working Paper: NBER ID: w20446
Authors: Vicki Been; Ingrid Gould Ellen; Michael Gedal; Edward Glaeser; Brian J. McCabe
Abstract: Since Brooklyn Heights was designated as New York City's first landmarked neighborhood in 1965, the Landmarks Preservation Commission has designated 120 historic neighborhoods in the city. This paper develops a theory of heterogeneous impacts across neighborhoods and exploits variation in the timing of historic district designations in New York City to identify the effects of preservation policies on residential property markets. We combine an extensive dataset of residential transactions during the 35-year period between 1974 and 2009 with data from the Landmarks Preservation Commission on the location of the city's historic districts and the timing of the designations. Designation raises property values within historic districts, but only outside of Manhattan. In areas where the value of the option to build unrestricted is higher, designation has a less positive effect on property values within the district. Consistent with theory, properties just outside the boundaries of districts increase in value after designation. There is also a modest reduction in new construction in districts after designation.
Keywords: historic districts; housing markets; New York City; property values; preservation policies
JEL Codes: A0; R0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| historic district designation (N90) | property values within districts (R33) |
| historic district designation (N90) | property values outside districts (R33) |
| historic district designation (N90) | new construction activity within districts (L74) |
| historic district designation (N90) | property values in neighborhoods with lower initial development potential (R38) |