Essays in Urban and Real Estate Economics
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how do urban regulations and interventions shape long-run redevelopment, neighborhood change, and real estate market dynamics? Using Hong Kong as the empirical setting, I study three major policy episodes—a large-scale zoning reform following the closure of the downtown airport, the demolition of the Kowloon Walled City, and the development of public rental housing. Chapter 1, “How Real Estate Responds to Regulatory Changes Over the Long Run,” examines developers’ responses to relaxed building height limits (“upzoning”) and the role of expectations in shaping redevelopment timing. I exploit two sequential reforms
a 43% relaxation along a newly narrowed flight path in 1989, announced alongside plans to relocate the downtown airport, and the 1998 airport closure that removed all restrictions. Using 30m × 30m grid-level data spanning three decades and a spatial regression discontinuity design at upzoning borders, I show that anticipated future deregulation can raise the option value of waiting and dampen redevelopment and maintenance investment under the initial reform. Once uncertainty is resolved, large-scale deregulation can overcome durability frictions and drive rapid convergence in the built environment. Chapter 2, “Slum Clearance and Economic Development,” estimates the short- and long-run impacts of slum clearance by leveraging the demolition of the Kowloon Walled City, one of the most densely populated settlements in modern history. Using panel neighborhood census data (1981-2016), I document short-run increases in surrounding density and declines in income, followed by long-run population decreases and income growth consistent with gentrification, corroborated by shifts in education, employment, housing, and migration. Chapter 3, “The Effects of Public Rental Housing Development on Property Values in Nearby Neighborhoods,” studies how public rental housing construction affects surrounding property values. Using transaction data before, during, and after construction, I find temporary price declines during construction but no persistent post-completion effects. Impacts vary by site context. Infill projects in established neighborhoods show short-run price declines during construction. Developments on reclaimed land are associated with price increases, likely reflecting complementary infrastructure and amenity improvements.
This dissertation comprises three independent chapters in urban and real estate economics, unified by a central question
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