The long-run implications of slum clearance: A neighborhood analysis

This paper analyzes the federal urban renewal and slum clearance program. This program was enacted by Title I of the Housing Act of 1949 and was one of the largest and most controversial policies used to rehabilitate neighborhoods in the United States. I construct a new spatial dataset documenting the locations of approximately 200 urban renewal projects across 28 U.S. cities. I use this newly constructed dataset to examine the characteristics of neighborhoods cleared for redevelopment and the effect that urban renewal projects had on neighborhoods over time. I show that conditional on experiencing urban blight, black neighborhoods were between two and three times more likely than white neighborhoods to be targeted for slum clearance. Further, the resulting redevelopment led to a persistent decline in population density, housing density, and in the share of black residents in directly treated neighborhoods. Simultaneously, median rents and median incomes increased. These results are consistent with predictions from a spatial equilibrium model of locational choice. Viewed through the lens of this model, my results imply that households in the lowest end of the income distribution were made worse off by slum clearance policies. JEL Codes: I38, N32, N92, R23, R38, R58 I am extremely grateful to Allison Shertzer and Randall Walsh for their continued guidance and support throughout this project. I also thank Jason Cook and Brian Kovak for helpful comments and suggestions, as well as participants at the applied microeconomics brown bag at the University of Pittsburgh, the NBER Development of the American Economy poster session, University of Michigan’s H2D2 Conference, and the AERUS Midwest Graduate Student Summit. Financial support for this project has been generously provided by the Economic History Association’s Exploratory Travel and Data Grant. This research was also supported in part by the University of Pittsburgh Center for Research Computing through the resources provided. All errors are my own. Department of Economics, Bowdoin College, jlavoice@bowdoin.edu.