Measuring and Interpreting the Effects of a Public-Sector-Led Urban Renewal Project on Housing Prices—An Empirical Study of a Comprehensive Development Area Zone Developed upon ‘Taking’ in Hong Kong

Lawrence W C Lai, Kwong Wing Chau, Edward C Y Yiu, Kelvin S K Wong, Wah Sang Wong and Pearl Y L Chan
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Wah Sang Wong: Department of Architecture, University of Hong Kong, Pokfulam Road, Hong Kong, China
Pearl Y L Chan: Jones Lang LaSalle, 28th Floor, One Pacific Place, 88 Queensway, Hong Kong, China

Environment and Planning B, 2007, vol. 34, issue 3, 524-538

Abstract: Statutory zoning, as a regulatory tool, is generally considered as a means to introduce and maximize positive externalities and to preempt and internalize negative externalities; thence the land value of the regulated land and its immediate neighbourhood is enhanced. Yet, empirical evidence of the effects of zoning on land values has been conflicting. This paper empirically evaluates the panel data for a district in which two large-scale commercial properties have been developed in a comprehensive development area (CDA) statutorily rezoned from commercial/residential status on land taken by compulsory purchase by a public urban renewal agency in Hong Kong. A price gradient analysis is used to test the effects of such rezoning. The results show that the effect of the new CDA zoning on the prices of housing surrounding the CDA is uncertain. The Pigovian argument for the positive effect of zoning is therefore refuted as a justification for the zone under investigation, and the meaning of the finding for urban renewal planning is discussed. Some urban design factors that may have contributed to the failure of the projects are also discussed.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envirb:v:34:y:2007:i:3:p:524-538

DOI: 10.1068/b31139

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