Association for Public Policy Analysis & Management

Cities grow in layers over time. As population and land values increase, older, smaller buildings are replaced with higher density, higher value structures. However, direct costs of redevelopment, and political and institutional barriers such as zoning, may constrain replacement of older structures, leading to alternate forms of redevelopment. In this paper, I use administrative data on building permits in Washington DC to examine variation in the type and location of residential investment. Results suggest that residential investment occurs in several different forms. The type and quantity of investment varies across neighborhoods. Additions and alterations are more common in neighborhoods with high housing values and older housing, but the location of new construction is more idiosyncratic.