# RECORD b0f7dc6f984405958850264589ee0ef2b7e42b69 # TITLE: Neighborhood Historic Preservation Status and Housing Values in Oklahoma County, Oklahoma # YEAR: 2019.0 VENUE: Journal of Regional Analysis & Policy DOI: 10.68479/001c.9769 # AUTHORS: D. Rickman # PAGES: 10 CANDIDATE TABLE PAGES (1-based): [5] # ABSTRACT: Using county tax assessor data, this paper estimates the property value impacts of his-toric designation of neighborhoods for Oklahoma County, Oklahoma. Methodological contributions of the study include allowing for spatial and temporal variation of hedonic prices and historic district property values along with the use of finely delineated spatial fixed effects. Neighborhood historic designation is found to be associated with significant relative appreciation of housing values in most districts. Factors appearing to influence the rate of appreciation are the time span of neighborhood historic designation and the area crime rate. The variation in results across historic neighborhoods suggests that policy makers need to take into account the conditions under which historic designation most likely can succeed. ===== PAGE 1 (score 5, numeric-paren 0, table-words 0, var-words 5) ===== Neighborhood Historic Preservation Status and Housing Values in Oklahoma County, Oklahoma Dan S. Rickman Oklahoma State University – USA Abstract. Using county tax assessor data, this paper estimates the property value impacts of his- toric designation of neighborhoods for Oklahoma County, Oklahoma. Methodological contri- butions of the study include allowing for spatial and temporal variation of hedonic prices and historic district property values along with the use of finely-delineated spatial fixed effects. Neighborhood historic designation is found to be associated with significant relative apprecia- tion of housing values in most districts. Factors appearing to influence the rate of appreciation are the time span of neighborhood historic designation and the area crime rate. The variation in results across historic neighborhoods suggests that policy makers need to take into account the conditions under which historic designation most likely can succeed. 1. Introduction An important consideration regarding historic de- signation of neighborhoods is the effect on property values. Historic designation of residential neighbor- hoods can either positively or negatively affect proper- ty values. It can increase property values by enhanc- ing neighborhood prestige, providing protection from construction projects, increasing neighborhood social capital, and providing tax incentives for improve- ments in neighborhood properties, while designation potentially hurts property values because of regulato- ry restrictions on development (Listokin, Lahr and Grady, 2008, Ch. 6). The issue is of importance both for local homeown- ers and for those involved in local planning and eco- nomic development policy making. Historic designa- tion may be seen as a way to revitalize central city areas. Similarly, declining or stagnant rural areas may view historic designation as a way of increasing both tourism and the amenity attractiveness of the area for prospective residents. Given this interest, the proper- ty value impact of historical designation continues to be discussed, debated and examined empirically (e.g., Coffin, 1989; Gale, 1991; Schaeffer and Millerick, 1991; Clark and Herrin, 1997; Coulson and Leichenko, 2001; Leichenko, Coulson and Listokin, 2001; Coulson and Lahr, 2005). Yet, the empirical approaches used have been varied and refinements of the methodology con- tinue to be pursued. Therefore, this study uses a hedonic pricing ap- proach to estimate the impacts of historic designation on residential property values in Oklahoma County, Oklahoma. Using county assessor tax data, changes in property values across all Oklahoma County neigh- borhoods are examined, including National Register Districts, state and locally designated historic districts, and control areas without any historical designation. Contributions of the study include allowing for spatial and temporal variation in hedonic prices and values of historic district designation, while also using Geo- graphic Information System (GIS) identifiers to create finely-delineated spatial fixed effects. The next section reviews the empirical literature on estimating the economic effects of historic designation of neighborhoods for guidance in empirical specifica- tion. Section 3 then formulates and discusses the em- pirical model used in the study. Results and discus- sion follow in Section 4. Generally it is found that his- toric district neighborhoods experience increased property values relative to non-historic district neigh- borhoods. However, the increases are not uniform across districts and appear related both to the length of time the neighborhood has had historic designation JRAP 39(2):99-108. © 2009 MCRSA. All rights reserved. ===== PAGE 5 (score 46, numeric-paren 0, table-words 7, var-words 20) ===== Historic preservation status and housing values 103 availability of nearby public parks, access to primary roads, proximity to attractive urban amenities such as Bricktown in downtown Oklahoma City, proximity to disamenities such as pollution, or access to water recreation opportunities. In addition, although not shown, the results reveal changes in the relative attrac- tiveness of many neighborhoods. For example, houses in one neighborhood, which comprised about 5,500 properties in the Year 2000 sample and encompassed an area including many of the historic districts, went from having a lower house value by $3,655 in 2000 after controlling for housing characteristics to a higher value by $45,780 in 2003, an increase of $49,435. Val- ues in other broad neighborhoods were much more stable. Table 1. Base Model regression results. Year 2000 Year 2003 Variable Coefficient t-Statistic Coefficient t-Statistic Constant 32,744.69 4.972 -744.0 -0.066 Square Feet 19.903 4.866 32.911 4.582 (Square Feet)2 0.004 5.393 0.007 6.423 Age -455.160 -41.319 -614.98 -16.648 (Age)2 0.415 7.327 2.002 4.641 Rooms/Square Feet 1,093,897 2.406 5,350,646 5.39 Bedrooms/Rooms -3,887.943 -2.947 -1,082.821 -0.388 Bathrooms 896.266 1.683 10,706.93 10.576 Year Remodeled 1.056 11.900 0.343 2.256 Garage Square Feet 12.673 27.806 16.726 27.861 Carport Dummy Variable (Yes=1) 939.558 1.047 9,104.345 7.346 Porch Square Feet 8.835 10.099 11.136 7.490 Number of Stories -7,284.721 -15.187 -3,603.818 -5.259 Foundation is a Slab -413.565 -1.772 -5,099.968 -15.189 Roof Type: Gable 4,664.230 24.293 -2,862.608 -15.282 Roof Type: Flat -1,520.997 -12.607 -16,895.01 -8.113 Roof Cover: Composition Shingle -2,118.425 -1.369 -7,863.394 -7.362 Roof Cover: Wood Shake 1,055.740 1.524 -2,663.464 -1.931 Exterior: Frame Masonry Veneer 199.077 0.224 -6,341.225 -9.878 Crown Heights 8,855.167 4.957 61,823.22 47.073 Edgemere Park 6,854.990 3.201 41,013.14 27.463 Jefferson Park 6,562.413 8.427 -2,802.856 -2.708 Shepherd -837.900 -1.205 8,740.323 12.206 Paseo -2,434.624 -1.444 1,289.545 0.712 Heritage Hills -11,390.75 -1.917 33,808.32 3.031 Putnam Heights -6,365.538 -1.747 -17,303.18 -4.523 Mesta Park -1,409.864 -1.365 2,171.240 1.362 Gatewood East 1,752.864 1.290 6,523.245 5.043 Gatewood West -2,490.629 -3.251 9,928.553 9.769 Capitol-Lincoln -2,446.370 -2.370 15,207.58 10.762 Condition/Quality Variables (Joint F-statistic and p-value) 632.152 0.000 90.904 0.000 Neighborhood Fixed Effects (Joint F-statistic and p-value) 491.949 0.000 376.059 0.000 R-squared 0.877 0.852 Number of Observations 179,526 188,907 ===== PAGE 6 (score 18, numeric-paren 0, table-words 6, var-words 6) ===== 104 Rickman In the Year 2000 sample, only four of the eleven historic districts have higher housing values (Crown Heights, Edgemere Park, Jefferson Park and Gatewood East), though the eleven variables are jointly signifi- cant (F=14.77, p-value=0.00). However, in the Year 2003 sample all but two (Jefferson Park and Putnam Heights) have higher housing values and the eleven variables are jointly significant (F=111.22, p- value=0.00). Dramatic increases occurred in Crown Heights, Heritage Hills and Edgemere Park. For comparison purposes, the first column of Table 2 displays the raw average change in housing values, i.e., the change which occurred not controlling for housing and location characteristics. The average change ranged from a low of approximately thirteen thousand dollars to a high of over ninety thousand dollars. For reference, the average property value in the samples increased from $66,201 to $84,027, an in- crease of $17,826. This is exceeded by the increases in historic neighborhoods in all but three cases. For houses between 2,000 and 3,000 square feet, in which the mean square footage is 2,385 and the mean age is 25 years, the average value increased from $106,501 to $125,984 (not shown), producing an increase compa- rable to the entire sample. Table 2. Historic district house value appreciation ($). Raw Sub-Model 1 Sub-Model 2 Sub-Model 3 Full Model CROWN HEIGHTS 88,094 72,259 71,755 59,178 52,968 EDGEMERE PARK 64,229 44,398 43,894 34,346 34,158 JEFFERSON PARK 13,722 -2,353 -2,582 -8,261 -9,365 SHEPHERD 31,893 15,337 14,833 9,872 9,578 PASEO 12,926 -3,263 -3,968 4,598 3,724 HERITAGE HILLS 94,279 73,260 81,672 42,891 45,199 PUTNAM HEIGHTS 36,651 21,694 21,190 3,660 -10,938 MESTA PARK 31,773 16,300 24,712 13,762 3,581 GATEWOOD EAST 13,136 4,616 7,652 5,556 4,770 GATEWOOD WEST 31,855 11,101 19,500 14,292 12,419 CAPITOL-LINCOLN 21,304 4,955 13,367 6,539 17,654 Because they represent increases relative to the av- erage change in their broader area, in which they also reflect controlling for housing characteristics, the in- creases in the final column for historic districts are smaller than those in the first column. Specifically, each house in a historic district takes a value of 1 for the broad area of location and a value of 1 for location within the historic district. A positive value for the historic district coefficient indicates a higher value for the house relative to those in the surrounding area, controlling for housing-specific characteristics. In fact, because of the large estimated increase for the Crown Heights Historic District three additional dummy var- iables are included in the regression to control for spe- cific neighborhoods surrounding Crown Heights. Thus, the coefficient for the Crown Heights variable is interpreted as the effect relative to houses in the broader areas, and relative to the neighborhoods im- mediately surrounding it. This greatly reduces the likelihood that the estimated increased value in the Crown Heights District is attributable to general in- creased attractiveness because of other considerations (e.g., increased performance of its school district or increased demand for it). Moreover, many of the his- toric districts are located in close proximity to one another when compared to other areas in Oklahoma County. 4.2 Sensitivity analysis To assess the sensitivity of the results shown in the final column to potential econometric issues such as multicollinearity, three other regressions are per- formed, with the results for the changes in house val- ues in historic districts shown in columns 2-4 of Table 2. The column 2 results are produced from regressions which solely include the historic district dummy var- iables. Thus, they do not control for other housing characteristics or for the effects of location in the broader areas. The calculations reflect the change in the historic district relative to the omitted neighbor- hood. The results in column 3 reflect the addition of the broad neighborhood fixed effects to the regression only containing historic district dummy variables. The historic district and neighborhood variables collective- ly explain about 20 percent of the variation in housing values (not shown). The similarity of the results in columns 2 and 3 suggest there are few changes in his- toric district housing values which are simply attribut- able to changes occurring in their broader areas.