Development and Neighborhood Revitalization: The Effects of Residential Investment on Property Values in Durham, NC

Proponents of urban revitalization assert that neighborhood redevelopment is a win-win proposition for all stakeholders involved, as development cre-ates positive externalities which resonate beyond the scope of each project. Property values for neighborhood residents improve, the local government en-joys the budget boost of a higher tax base, and developers collect well earned profits. This frequently studied and accepted line of thinking supports the use of measures such as tax increment financing, subsidized development, and lighter zoning standards in communities across America. This study examines the view that residential development creates positive externalities through the study of taxable values in the neighborhood surrounding Durham, North Caro-lina's Lyon Park. In 2008 a sustained neighborhood revitalization effort led by Self Help, a local non-profit, coincided with a county wide tax reassessment, providing a unique ability to quantify the effects of redevelopment on property values in Lyon Park. The results find no evidence of positive development externalities reflected in improved real estate values for surrounding proper-ties, challenging many of the arguments used to champion urban revitalization initiatives.