The Impact of Land Bank Demolitions on Property Values

A modern land bank is a public entity that purchases and demolishes blighted housing to remove negative externalities. We estimate the impact of land bank demolitions on surrounding property values for a medium-sized municipality. Using a spatial correction hedonic model of house prices, we find modest but imprecise increases in sales prices associated with land bank activity in a neighborhood. In general, the impact estimates we find are smaller than those found in the literature for a much larger metropolitan area. We speculate on the cause of this difference in findings.