Targeting Investments for Neighborhood Revitalization

Abstract

How should we allocate public resources for revitalizing low-income urban neighborhoods? Once public investments in an area reach some minimum threshold, do they leverage substantial private resources? To address these questions, we examine a coordinated, sustained, and targeted revitalization strategy begun in 1998 in Richmond, VA. The strategy was developed through a data-driven, participatory planning process that garnered widespread support. Our analyses reveal that the program produced substantially greater appreciation in the market values of single-family homes in the targeted areas than in comparable homes in similarly distressed neighborhoods. The greatest impacts occurred when public investments over 5 years exceeded $21,000 per block, on average. This appears to make the strategy potentially self-financing over a 20-year horizon, with public contributions offset by future increments in property tax revenues from target areas.