Preserving History or Hindering Growth? The Heterogeneous Effects of Historic Districts on Local Housing Markets in New York City

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

No 20446, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: A1 R0 (search for similar items in EconPapers)
Date: 2014-09
New Economics Papers: this item is included in nep-his and nep-ure
Note: DAE
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Citations: View citations in EconPapers (6)

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