Association for Public Policy Analysis & Management

Recent research has highlighted the importance of “place” in shaping economic mobility and well-being, yet there is a critical gap in our understanding of what types of interventions can generate neighborhood improvements.  This study is motivated by the question of whether place-based investments work. When we undertake community revitalization efforts, do they lead to improved neighborhood conditions? Do residents benefit from higher home values, lower crime rates, or more employment opportunities?  Or is community revitalization just a euphemism for gentrification, in which real estate developers benefit, but existing residents are pushed out?

This study provides a first look into these questions by examining whether HOPE VI changed the demographic and socio-economic composition of the surrounding community.  While other studies have descriptively assessed the impact of selected HOPE VI sites on neighborhood-level variables, this study contributes to the literature in two important ways.  First, I draw on a unique dataset that includes data on all 261 HOPE VI redevelopment projects, including their location and information about the scale and nature of the redevelopment, thus allowing me to examine the impact HOPE VI across a diverse array of housing market contexts.

Second, I use quasi-experimental methods—a difference-in-difference model—to isolate the impact of HOPE VI.  The difference-in-difference specification relies on a case-control methodology where each neighborhood with a HOPE VI award is matched with comparably poor neighborhoods that did not undergo HOPE VI redevelopment.  I match “treatment” and “control” neighborhoods based on their baseline 1990 census tract characteristics (prior to the announcement of the HOPE VI program), as well their demographic and economic trajectories between 1980 and 1990. I next observe these neighborhoods in 2000 and 2010, assessing whether there are measurable differences in treatment neighborhoods’ demographic and socio-economic characteristics, above and beyond those experienced by control neighborhoods. I hypothesize three key routes through which HOPE VI may have influenced the opportunity structure in poor neighborhoods: changing real estate conditions, changing labor market conditions, and changing educational resources. I thus examine neighborhood change along multiple dimensions: the value and tenure mix of residential units (including the level of mortgage investment), the characteristics of the labor market (e.g. unemployment rate) and number of business establishments, and the structure and quality of neighborhood schools. I also examine whether the racial composition of the neighborhood has changed, providing some initial analysis of whether the improvements benefited existing residents or whether the changes are driven by new families moving in. This study will thus provide new evidence of whether place-based policies can lead to better neighborhood opportunity structures for families.