The Price of Preserving Neighborhoods: The Unequal Impacts of Historic District Designation

Abstract

Policies affecting cultural assets are popular yet imperfectly understood tools to shape local economic development. Historic preservation policies, for example, can have markedly different implications for original residents, prospective residents, and developers, even in the same city. Therefore, merely identifying its average effect can obscure important heterogeneity in its impact. This study examines the property value impacts of local and national historic districts across the distribution of property prices and how those differential impacts vary with the restrictiveness of the policy. A quantile regression model identifies the heterogeneity of effects among higher and lower end properties. The results reveal large differences between national and local districts, interior and buffer properties, and for different property values. These findings highlight the importance of and complexity in how housing markets react to attempts to guide local economic development.