How does urban renewal affect housing price? Evidence from Beijing shantytown renewal plan

ABSTRACT

In this paper, we use the shantytown renewal project data in Beijing, China, to explain how the renewal type as restrictions has aheterogeneous effect on housing prices. Using the time-varying difference-in-differences approach, we found that refurbishment is ineffective and the interrupted renewal projects will have significantly negative expected effect. Only rebuilding can make positive impact on housing price both within and surrounding shantytowns.

KEYWORDS:

• Urban renewal
• housing externality
• shanty towns in Beijing
• time-varying difference-in-differences

JEL CLASSIFICATION:

• R00
• R31

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ State-owned institutions include state-owned enterprises, institutes of central and local governments, national universities and research institutes. Before China’s housing reform in 1998, these organizations would distribute the houses using right to employees as welfare, and such type`s houses are named ‘Directly Managed Public Property House’. With the reform or closure of state-owned institutions, the property rights of these houses have become more chaotic.

² The statistics descriptions in Table 2 reported the original data of the house characteristics. Except for dummy variables ‘Decoration’, ‘Heating’ and ‘Elevator’, taken logarithms in regression.

³ Time-invariant factors such as shantytown`s ownership, area, location, etc. Time-varying factors such as light pollution caused by the renewal progress, etc.