Posted by Sevrin Waights, LSE Conservation areas seem like an uncontroversial policy. They protect the visual appearance of historic neighbourhoods – for example, by preventing your neighbours installing modern ‘improvements’ such as PVC windows

Waights, Sevrin

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28/06/2017 SERC: Spatial Economics Research Centre: Game of Zoneshttp://spatial-economics.blogspot.co.uk/2013/10/game-of-zones.html 1/2T u e s d a y ,  2 2  O c t o b e r  2 0 1 3Game of ZonesPosted by Sevrin Waights, LSE Conservation areas seem like an uncontroversial policy. They protect the visual appearance of historic neighbourhoods – for example, by preventingyour neighbours installing modern ‘improvements’ such as PVC windows. But this protection comes at a cost: you can no longer renovate your less-than watertight roof, add that conservatory you always wanted, or chop downthe tree in your garden that is blocking your light. These costs and benefits are considered by would-be buyers and will therefore capitalise into yourhouse price. So the obvious question is: if you were a homeowner, would you want to be designated or not? This leads to a further question: can homeowners gamethe designation process to their advantage? These are the questions I try and answer in new research for SERC, working with my colleagues GabrielAhlfeldt, Kristoffer Moeller and Nicolai Wendland.Let’s imagine a scenario where conservation areas (CAs) are designated by an all-powerful ‘social planner’, who acts according to homeowner interests.Heritage-rich neighbourhoods would get CA status because the benefits of preservation will outweigh the costs of the restrictions. In turn, CA designationshould increase house prices in those neighbourhoods.  If designation status was solely determined by heritage, the planner would quickly run out of neighbourhoods to designate. But as we can see, new CAshave been designated in every year since the policy's introduction in 1967:Figure: Percentage of all CAs designated in each year So what’s driving the newer designations? Neighbourhoods’ ‘heritage’ is fairly fixed, but the value placed on heritage can change a lot withneighbourhood composition. Areas that are gentrifying, for example, typically have rising shares of higher-income homeowners with degrees . Theseincomers have substantial buying power, and are both willing and able to pay more for 'heritage' - especially if it is secured by conservation area status.Since gentrification increases the potential returns to CA status we should see designation continue even as the stock of 'historic' neighbourhoods isused up. In these newer CAs, 'heritage' status becomes more subjective.In our paper we test these predictions. First we examine the link between gentrification and designation, using data on conservation areas provided byEnglish Heritage and on neighbourhood composition from the UK Census (1991 and 2011). We find that a 1% increase in the degree share is associatedwith an 11% increase in the designated land share – a strong effect. Second, we test our house price predictions by examining over 1 million property transactions. As predicted, we find a zero price effect immediately onCA designation, followed by subsequent house price growth.This tells us that designations appear to adhere to homeowner economic interests, implying that they can influence the process. How might this happenin practice? Local politicians like doing popular things, and CA designation is certainly popular with homeowners, who tend to turn out in force in localelections. In the UK, public engagement is also actively encouraged when neighbourhoods are nominated as potential conservation areas. Sincehomeowners are typically better able to form special interest pressure groups this may work to their advantage. All this supports the ‘homevoter’hypothesis that homeowners have a strong influence over the political decisions that affect house prices. When you play the game of zones, then, youwin if you own.  0  More  Next Blog»28/06/2017 SERC: Spatial Economics Research Centre: Game of Zoneshttp://spatial-economics.blogspot.co.uk/2013/10/game-of-zones.html 2/2Newer Post Older PostHomeSubscribe to: Post Comments (Atom)Posted by serc admin on Tuesday, October 22, 2013 Recommend this on GooglePost a CommentNo comments:Simple theme. Powered by Blogger.

Game of zones

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