Bricks or Cash? Externalities of Housing Upgrading in High-density Cities

Sumit Agarwal, Ying Deng, Yi Fan (), Qi Gao, Jing Li and Lin Ma

Papers from arXiv.org

Abstract: We estimate housing externalities in a high-density city, exploiting the staggered rollout of Singapore's nationwide Main Upgrading Programme for public housing. Controlling for nonrandom neighborhood exposure, we find that upgrading raises treated buildings' prices by 11.5% upon completion and neighboring buildings' resale prices by about 2% within 500 meters, decaying to zero beyond. A model with distance-decaying externalities shows that in dense settings spillovers justify the distortions of in-kind provision; this advantage diminishes and reverses at lower densities. Administrative data on over 2 million residents show that upgrading disproportionately retains older incumbents, suggesting age-specific amenities as an underexplored externality channel.

Date: 2026-09
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