Creative Destruction: Barriers to Urban Growth and the Great Boston Fire of 1872

Abstract

Urban growth requires the replacement of outdated buildings, yet growth may be restricted when landowners do not internalize positive spillover effects from their own reconstruction. The Boston Fire of 1872 created an opportunity for widespread simultaneous reconstruction, initiating a virtuous circle in which building upgrades encouraged further upgrades of nearby buildings. Land values increased substantially among burned plots and nearby unburned plots, capitalizing economic gains comparable to the prior value of burned buildings. Boston had grown rapidly prior to the Fire, but negative spillovers from outdated durable buildings had substantially constrained its growth by dampening reconstruction incentives. (JEL H76, N91, R11, R52, R58)

Natural disasters and relief assistance: Empirical evidence on the resilience of U.S. counties using dynamic propensity score matching

“…Compared to unburned areas, the areas affected by the fire saw much denser development that is still evident over a century later. Furthermore, Hornbeck and Keniston () found positive externalities on nearby unburned properties due to rebuilding after the Boston Fire of 1872.…”

How Government’s Policy Implementation Methods Influence Urban Villagers’ Acceptance of Urban Revitalization Programs: Evidence from China

“…Conflicts between government and homeowners in urban revitalization are common in developing countries [1][2][3], and most of the conflicts arise from the process of internalizing externalities which are understudied [4][5][6]. This study aims to provide new knowledge for the governments to enact more effective policies to proceed redevelopment by internalizing the positive externalities of urban revitalization.…”

Shaking Up the Equilibrium: Natural Disasters, Economic Activity, and Immigration

“…Our paper also relates to a growing literature that investigates the e↵ect of natural disasters on city development. Hornbeck and Keniston (2017) and Siodla (2015Siodla ( , 2017, focusing respectively on the Great Boston Fire of 1872 and the 1906 earthquake in San Fransisco, find beneficial long-run e↵ects on city development from these shocks. In contrast to these studies which focus on the development of a single city, the present paper evaluates how a shock to the placement of people a↵ected the relative size of cities and towns in a whole region over time.…”