Abstract:
This paper analyzes the federal urban renewal and slum clearance program. This program was enacted by Title I of the Housing Act of 1949 and was one of the largest and most controversial location-based economic development policies used to rehabilitate neighborhoods in the United States. I construct a new spatial dataset documenting the locations of approximately 200 urban renewal projects across 28 U.S. cities. I use this newly constructed dataset to examine the characteristics of neighborhoods cleared for redevelopment and the effect that urban renewal projects had on neighborhoods over time. I show that conditional on experiencing urban blight, black neighborhoods were between two and three times more likely than white neighborhoods to be targeted for slum clearance. Further, the resulting redevelopment led to a persistent decline in population density, housing density, and in the share of black residents in directly treated neighborhoods. Simultaneously, median rents and median incomes increased. These results are consistent with predictions from a spatial equilibrium model of locational choice. Viewed through the lens of this model, my results imply that households in the lowest end of the income distribution were made worse off by slum clearance policies.
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