Back to Black … and Green? Location and policy interventions in contemporary neighborhood housing markets

Abstract

The post-war flight from US central cities led to widespread decay and devaluation in downtown housing markets. In a reversal of fortunes, distant housing prices soared while the dense urban core lagged. However, over the course of the 2000–2006 housing bubble, we find that the markets in often ignored mid-sized cities shifted back to the downtowns. This research examines the factors influencing neighborhood housing values, including location and public policy interventions. Our analysis period begins with 2000 and has two end points: one at the close of the national housing bubble in 2006 and another in 2008 during the housing market collapse. Based on OLS and spatial regression analyses of percent increases in neighborhood housing values for Louisville, Kentucky, we find that higher downtown property increases are due in large part to historic preservation districts, a university–community partnership, and a HOPE VI site. We confirm that our findings hold even through the 2007–2008 housing crisis. We ultimately theorize that higher downtown appreciation is due to three factors: green urbanism, planning/policy successes, and the surprising non-significance of the traditionally negative predictor race (nonwhite percentage).