The Premium of the Old Neighborhood Upgrading Projects in China: Evidence from Hefei

Numerous studies have investigated the impact of larger-scale urban demolitions or reconstructions on housing markets, yet few researches on the housing premium of small scale state-led urban renovation. One such policy is the old neighborhood upgrading projects, which aim to enhance neighborhood services without involving house ownership change, building demolition, or resident resettlement. Taking these projects as quasi-natural experiments, we employ a staggered Difference-in-Differences (DID) method to examine its’ premium effects in Hefei, China. Our findings reveal that surrounding neighborhoods within a 500-meter radius of the upgrading areas experienced a significant increase in prices by 6.01% compared to neighborhoods located beyond this range. Moreover, the premium effect demonstrates temporal-spatial dynamics, showing that the premium effect diminishes as time passes or distance increases. The mechanism analysis shows the old neighborhood upgrading projects revitalize community vitality, thereby increasing housing prices of surrounding neighborhoods.