The Impact of Community Development Corporations on Neighborhood Housing Markets

Abstract

Housing investment activities of community development corporations (CDCs) can be associated with a positive impact on the residential real estate market within their respective service area. Relying on a pseudo-experimental approach, the appreciation rate of single-family housing in CDC treatment and comparison areas is tested with a traditional hedonic model with pooled data. The results suggest that the area that is served by the 12 established CDCs operating in Center Township in the city of Indianapolis experienced a higher overall appreciation in the mean residential home value from 1987 to 2000 than did a comparison area in Center Township not served by CDCs.

Measuring the Impacts of Community Development Initiatives

“…assumes that difference between target neighborhood change and change in control neighborhoods is attributable to intervention See Weiss (1972); Vidal, Howitt, and Foster (1986); Taub (1988Taub ( , 1990; Mueller (1995); Taylor (2002); Smith (2003); Zielenbach (2003) Pre-and postintervention Indicator level or slope in target neighborhood after intervention is compared with level or slope in target neighborhood before intervention Counterfactual is preintervention level or slope;…”

“…assumes that difference between pre-and postintervention level or slope is due to the intervention See Weiss (1972), Rossi (1999), Bloom andLadd (1982) Bloom (2003) Indicator level or slope in target neighborhood after intervention is compared with level or slope in target before intervention and with changes in control neighborhoods before and after intervention Counterfactual is change in control neighborhoods before and after intervention; assumes that "change in the differences" between target and control neighborhoods before and after intervention is due to intervention See Engberg and Greenbaum (1999), Greenbaum and Engberg (2000), Bloom and Glispie (1999) Thus, only the relative advantages of the target neighborhood over the control neighborhoods after the intervention are taken as evidence of impact 4 (e.g., Weiss 1972;Vidal, Howitt, and Foster 1986;Taub 1988Taub , 1990Mueller 1995;Taylor 2002;Zielenbach 2003;Smith 2003).…”

“…In this application of measuring community development impacts, we analyzed large samples of home sales that occur at widely varied locations across a city and moments across a multiyear period. As such, it becomes a special application of a conventional "hedonic index model," the econometric dimensions of which have been developed over a long period (e.g., Goodman 1978;Clapp, Pace, and Rodriguez 1998;Smith 2003). 8 First, ε in equation 1 may be subject to spatial autocorrelation that, if left uncorrected, would lead to biased parameter estimates and misleading t tests.…”

“…challenge to measure the causal impacts of community development initiatives quantitatively has been raised by legislators, foundation program officers, and social scientists alike (Vidal 1992(Vidal , 1995Smith 2003). It is of central relevance for a host of contemporary policy initiatives, such as federal and state empowerment and enterprise zones, cities' targeting of Community Development Block Grant and HOME Investment Partnerships Program funds, the U.S. Department of Housing and Urban Development's Jobs Plus demonstration for increasing employment in public housing developments, and a plethora of CDC-driven neighborhood revitalization strategies.…”

Corporately Sponsored Redevelopment Campaigns and the Demographic Stability of Urban Neighborhoods: St. Louis Re-Revisited

“…Indeed, the idea of building a mixed‐income or even a gentrified neighborhood out of what had been a problematic dumping ground or a formerly segregated ghetto has appeal to old‐timers and newcomers alike, even when they are minorities (Brown‐Saracino & Rumpf, 2011; Boyd, 2008; Chaskin & Mark, 2010; Freeman, 2005; Papachristos, Smith, Scherer, & Fugiero, 2011; Sullivan, 2007). They see that the place where they live not only looks better and is a more congenial place to live but also earns them a better return on their housing investment (Smith, 2003).…”