Old, small and unwanted: Post-war housing and neighbourhood socioeconomic status

Abstract

Post-war neighbourhoods across the USA have declined in socioeconomic status over the past few decades. Over this same time period, the relative status of many of these neighbourhoods has dipped below that of older neighbourhoods. With the characteristics of post-war housing being arguably undesirable by current standards, extant literature claims the functional obsolescence of post-war housing is contributing to low and declining neighbourhood socioeconomic status. What remains unclear is whether the effect observed is due to housing age – post-war housing is vulnerable to physical depreciation given its age – or if there is a true post-war vintage effect influencing neighbourhood socioeconomic status beyond what age alone would predict. Using a panel model spanning 1990 to 2010, three main findings emerge. First, the presence of greater shares of post-war housing in neighbourhoods is associated with a small but significant decrease in neighbourhood status. Second, this effect varies across and within urban and suburban neighbourhoods. Third, there exists substantial heterogeneity in the effect across metropolitan areas that differ by housing supply growth and price. Together, these results imply that policymakers should consider the negative effects of functional obsolescence on top of the ills associated with ageing homes within certain spatial contexts.