Journal
JOURNAL OF URBAN ECONOMICS
Volume 92, Issue -, Pages 16-30Publisher
ACADEMIC PRESS INC ELSEVIER SCIENCE
DOI: 10.1016/j.jue.2015.12.002
Keywords
Historic districts; Housing; Option value
Categories
Funding
- Furman Center for Real Estate and Urban Policy at NYU
- Filomen D'Agostino and Max E. Greenberg Faculty Research Fund
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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. (C) 2015 Elsevier Inc. All rights reserved.
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