The impact of urban renewal on neighborhood housing prices in Taipei: an application of the difference-in-difference method

Abstract

This study examined the impact of urban renewal delineation time on housing prices in neighborhoods undergoing urban renewal. More specifically, the study used the difference-in-difference method to assess successful housing transactions in Taipei City from 2008 to 2011. According to the empirical results, before the implementation of urban renewal, the average housing price in the areas that later underwent urban renewal (the treatment group) was lower than that in neighborhoods that did not undergo urban renewal (the control group) by 11,180 NTD. After the urban renewal projects were publicly announced, the price per ping of the control group was increased by 148,800 NTD, while the price per ping of the treatment group was increased by 163,680 NTD. This means that the housing prices per ping in the urban renewal areas were increased by 14,880 NTD more than the housing prices per ping in the areas not affected by urban renewal after the urban renewal projects were publicly announced. This increase, then, indicates the value added after implementation of urban renewal delineation time on houses in the neighborhood. Therefore, research into the impact of urban renewal on housing prices should be concerned not only with the neighborhood factors or time factors of urban renewal delineation. Rather, the two types of factors should be considered at the same time.