Time-varying and land use-induced spillover effects of urban redevelopment: Evidence from Hong Kong*

This paper investigates the time-varying and land use-induced spillover effects of urban redevelopment, providing a lens through which to understand the welfare implications of both the temporal dynamics and the land use changes that occur through urban transformation. By analysing redevelopment project and housing transaction data from Hong Kong between 2005 and 2020, we find significant, positive spillover effects of urban redevelopment on local housing prices following the redevelopment announcement, with diminishing magnitudes as the redevelopment project proceeds. We also find heterogeneous spillover effects associated with different functional land use changes in redevelopment projects. The direction and extent of these externalities depend on the trade-off between the changes in local amenities and the changes in the level of competitiveness in the local housing market.