THE IMPACT OF URBAN RENEWAL ON NEIGHBORING HOUSING PRICES: AN APPLICATION OF HIERARCHICAL LINEAR MODELING

This study explored the impacts of urban renewal projects on neighboring housing prices. Hierarchical linear modeling (HLM) was employed to analyze urban renewal projects in Taipei City. The Level 1 independent variables pertained to a house itself (19,157 pieces of data), such as its structure and neighborhood attributes. The Level 2 variable pertained to an urban renewal project (23 cases of urban renewal), and the explanatory variable was the scale of each urban renewal project. The study examined whether differences exist between the impacts of various urban renewal projects on neighboring housing prices, and analyzed the extent to which the differences in neighboring housing prices are caused by the differences between urban renewal projects. The empirical results showed that the mean housing price varies significantly between each urban renewal project. In regard to the variance in the mean house price, 31.46% was caused by the differences between the urban renewal projects. The estimated coefficient of the grand floor area of urban renewal (FLAREA) had a positive value and attained a 1% level of significance. This indicates that the larger the scale of an urban renewal project, the larger its effects on neighboring housing prices. The empirical results of this study could better explain the impacts of the scale of an urban renewal project on the externalities of urban renewal.