Ustification of Public Subsidy: Externality Effects of a Historic Church Reuse Project on Neighborhood Housing Sale Prices in Cleveland, Ohio

Abstract

There is little empirical research that examines the externality effects of adaptive reuse projects on the urban economy to support the theoretical positions of existing literature. Adaptive reuse projects positively stimulate the local economy through job creation, sustainability, and the preservation of the historic sense of the community. This study empirically tests for externality effects of a church reuse project on nearby housing sale prices in Cleveland, Ohio. Using a hedonic approach that accounts for the spatial dependence, regression results of 2001 - 2002 data are compared to regression results of 2006 - 2007 data. The regression analysis reveals that positive externality effects reached up to 0.25 mile from the reuse project location. The study features a cost/benefit analysis that determined the public subsidy provided by the Cuyahoga County government will be justified by the project in less than 10 years.