Can Home Renovation Spur Neighborhood Revitalization?

By Abbe Will, Research Associate and Associate Project Director of the Remodeling Futures Program

Key measures of neighborhood change—such as household incomes, home values, rents, rates of college-educated residents, homeownership rates, and home remodeling activity—vary considerably across neighborhoods within our nation’s cities. A case study of Boston suggests that areas of the city undergoing revitalization—simply defined in this analysis by changes in median household incomes—experience stronger growth in renovation activity compared to neighborhoods classified as ‘set to revitalize’ or ‘not yet revitalizing’ and even neighborhoods defined as already revitalized, according to new preliminary research from our Remodeling Futures Program.

Understanding the role of home improvement in neighborhood change and urban renewal is increasingly possible as cities digitize their public records and make data accessible for research and analysis. Indeed, the Boston Area Research Initiative recently made available a property-level database of building permit applications in the City of Boston from 20102017, which we plan to use as a case study for disentangling the relationship between remodeling and neighborhood renewal. This work will build off some of the Center’s prior neighborhood change research, and findings from Boston may be informative for other cities across the nation that have also experienced strong growth in house prices and the resulting pressures on affordability.

Our preliminary research shows that remodeling activity and other measures of neighborhood change vary considerably among Boston neighborhoods. Figure 1 highlights four prototypical neighborhoods that we classified as already revitalized, revitalizing, set to revitalize, or not yet revitalizing. These classifications are based simply on levels of and changes in median household incomes within these neighborhoods relative to citywide median incomes from 19902000. The table shows significant differences in both current socioeconomic and demographic characteristics of these neighborhoods and how these characteristics have changed since 2000, as well as more recent changes in neighborhood remodeling permit activity since 2010.

Figure 1: Boston Neighborhood Change Typologies Suggest Revitalizing Areas See Stronger Growth in Remodeling

Notes: Already revitalized is defined as neighborhood median household income change greater than citywide change and level above city median in both first and last period. Revitalizing is income change greater than citywide change and level below city median in first period and above in last period. Set to revitalize is income change greater than citywide change and level below city median in both first and last period. Not yet revitalizing is income change less than citywide change and level below city median in both first and last period. Values for levels are neighborhood medians calculated as median values of all census tracts in the neighborhood. Home values are respondent reported in census surveys, not transaction-based home prices. Share college-educated is adult population age 25 and over with a bachelor’s degree. Permits are for additions or renovations to residential and mixed use properties.
Source: JCHS tabulations of JCHS, Neighborhood Change Database and Boston Area Research Initiative (BARI), Building Permit Applications in Boston.

This table indicates that above average increases in remodeling activity occurred in revitalizing neighborhoods in Boston, and revitalizing neighborhoods also experienced well-above average gains in household income, home values, and the share of residents with bachelor’s degrees. Interestingly, it appears that already revitalized neighborhoods—even with their higher incomes and home values—may not generate nearly as robust growth in remodeling activity as neighborhoods that are in the process of revitalizing. While much more work is required to fully disentangle the causality between home remodeling activity and neighborhood renewal, this first scratch of the data suggests that relatively strong growth in neighborhood incomes spurs remodeling activity, which further moves a neighborhood toward becoming revitalized.

Other research questions we want to answer with Boston neighborhood permit data include: What are the geographic patterns of residential remodeling investment and how have they changed over time? How has permitted remodeling activity differed in neighborhoods that have been deteriorating, stable, or improving in recent years or decades? And are more or different types of improvement activity occurring in areas with relatively strong vs. weak house price appreciation? Looking at the relationship between home improvement activity and other economic, social, and demographic changes in Boston neighborhoods over the past three decades should help shed light on these and many other questions.

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