Preserving history or restricting development? The heterogeneous effects of historic districts on local housing markets in New York City

Vicki Been, Ingrid Gould Ellen, Michael Gedal, Edward Glaeser, Brian J. McCabe

Research output: Contribution to journalArticlepeer-review

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 in which landmarking has 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 data on 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. Consistent with theory, properties just outside the boundaries of districts increase in value after designation. Further, designation raises property values within historic districts, but only outside of Manhattan. As predicted, impacts are more positive in areas where the value of the option to build unrestricted is lower. Impacts also appear to be more positive in districts that are more aesthetically appealing.

Original languageEnglish (US)
Pages (from-to)16-30
Number of pages15
JournalJournal of Urban Economics
Volume92
DOIs
StatePublished - Mar 1 2016

Keywords

  • Historic districts
  • Housing
  • Option value

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies

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