HOPE VI Neighborhood Spillover Effects in Baltimore

Nina Castells

As with the articles in this issue, this introduction reflects the views of the authors and does not necessarily reflect the views of the U.S. Department of Housing and Urban Development.

A major goal of the HOPE VI (Housing Opportunities for People Everywhere) Program is to improve surrounding communities by removing physically deteriorating public housing projects-a source of concentrated poverty and crime-and replacing them with mixed-income communities. This article uses a difference-in-differences approach to determine if Baltimore's three completed HOPE VI redevelopments had positive neighborhood spillover effects on surrounding property values. The analysis compares property sales prices in the area immediately surrounding each site before and after redevelopment to sales prices of comparable properties farther away but in the same neighborhood and at the same time. Only one redevelopment showed convincing evidence of a positive effect on property values in its surrounding neighborhood. This redevelopment was located in a less distressed neighborhood than the other two sites, adhered more closely to the mixed-income model, and implemented the project's social and community services component through a partnership between the private developer and the tenant organization. These findings suggest that adherence to HOPE VI's main principles of implementation and preexisting neighborhood conditions make a difference in neighborhood spillover effects and raise the question of whether HOPE VI investment is best targeted to severely distressed neighborhoods or to stable or already improving neighborhoods.