Spatially concentrated renovation activity and housing appreciation in the city of Milwaukee, Wisconsin

This article examines the relationship between renovation activity and housing prices in Milwaukee, Wisconsin, and whether the spatial distribution of renovation activity matters for housing appreciation. We hypothesize that the renovation of housing units is a spatially diffusive process and that proximity to renovated properties increases sale price, even after accounting for renovations to the property sold and neighborhood characteristics. By adopting a modeling approach that incorporates hedonic and repeat sales methods, we find strong evidence that proximity to renovation activity exerts a positive influence on housing appreciation and that this effect extends further in space than previously believed. Our findings lend support to policy interventions that are geographically targeted and suggest that cultivating clusters of renovated housing can be a valuable lever for neighborhood stabilization and revitalization. Though appreciation was more likely in tracts with a higher poverty rate, an analysis of annual sales volume data suggests that displacement of owner-occupier households as a result of gentrification was not widespread during the study period. However, further research to better understand spatially concentrated renovation activity as a potential contributor to the displacement of existing residents is needed.