Housing and Neighborhood Dynamics: A Simulation Study (Harvard Economic Studies)

This book assesses the effects of spatially concentrated programs for housing and neighborhood improvement. These programs provide direct assistance to low–income property owners in an attempt to arrest neighborhood decline and encourage revitalization.

The authors used the Harvard Urban Development Simulation Model (HUDS) in evaluating these programs. HUDS, a large–scale computer model, represents the process of housing rehabilitation, the production and consumption of housing services, household moving decisions, and other determinant of neighborhood change. The model simulates the behavior of approximately 80,000 individual households in two hundred residential neighborhoods of various quality levels. Unlike more aggregate models of urban development, HUDS has the capacity to identify how specific housing policies affect individual households as well as particular neighborhoods.

Since program evaluations are no better than the models on which they are based, the authors provide sufficient detail to permit those readers primarily interested in the policy analysis to assess the methodology and to understandhow the policies are represented in the model; a more technical discussion of the model is then presented in appendixes.

Although the simulations focus on policies that induce central–city property owners to upgrade their properties and thus stimulate revitalization, many of the authors' findings are relevant to larger issues of urban development. For example, the analysis of how housing rehabilitation subsidies affect the investment behavior of nonsubsidized property owners provides insights about the link between initial upgrading and sustained neighborhood improvement. The analysis also demonstrates how differences in location, household, and housing stock characteristics affect a particular neighborhood’s responsiveness to a common policy initiative.