1# RECORD b0f7dc6f984405958850264589ee0ef2b7e42b692# TITLE: Neighborhood Historic Preservation Status and Housing Values in Oklahoma County, Oklahoma3# YEAR: 2019.0 VENUE: Journal of Regional Analysis & Policy DOI: 10.68479/001c.97694# AUTHORS: D. Rickman5# PAGES: 10 CANDIDATE TABLE PAGES (1-based): [5]6# 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.789===== PAGE 1 (score 5, numeric-paren 0, table-words 0, var-words 5) =====1011 12Neighborhood Historic Preservation Status and Housing Values in 13Oklahoma County, Oklahoma 14 15 16Dan S. Rickman 17Oklahoma State University – USA 18 19 20 21Abstract. Using county tax assessor data, this paper estimates the property value impacts of his-22toric designation of neighborhoods for Oklahoma County, Oklahoma. Methodological contri-23butions of the study include allowing for spatial and temporal variation of hedonic prices and 24historic district property values along with the use of finely-delineated spatial fixed effects. 25Neighborhood historic designation is found to be associated with significant relative apprecia-26tion of housing values in most districts. Factors appearing to influence the rate of appreciation 27are the time span of neighborhood historic designation and the area crime rate. The variation 28in results across historic neighborhoods suggests that policy makers need to take into account 29the conditions under which historic designation most likely can succeed. 30 31 321. Introduction 33An important consideration regarding historic de-34signation of neighborhoods is the effect on property 35values. Historic designation of residential neighbor-36hoods can either positively or negatively affect proper-37ty values. It can increase property values by enhanc-38ing neighborhood prestige, providing protection from 39construction projects, increasing neighborhood social 40capital, and providing tax incentives for improve-41ments in neighborhood properties, while designation 42potentially hurts property values because of regulato-43ry restrictions on development (Listokin, Lahr and 44Grady, 2008, Ch. 6). 45The issue is of importance both for local homeown-46ers and for those involved in local planning and eco-47nomic development policy making. Historic designa-48tion may be seen as a way to revitalize central city 49areas. Similarly, declining or stagnant rural areas may 50view historic designation as a way of increasing both 51tourism and the amenity attractiveness of the area for 52prospective residents. Given this interest, the proper-53ty value impact of historical designation continues to 54be discussed, debated and examined empirically (e.g., 55Coffin, 1989; Gale, 1991; Schaeffer and Millerick, 1991; 56Clark and Herrin, 1997; Coulson and Leichenko, 2001; 57Leichenko, Coulson and Listokin, 2001; Coulson and 58Lahr, 2005). Yet, the empirical approaches used have 59been varied and refinements of the methodology con-60tinue to be pursued. 61Therefore, this study uses a hedonic pricing ap-62proach to estimate the impacts of historic designation 63on residential property values in Oklahoma County, 64Oklahoma. Using county assessor tax data, changes in 65property values across all Oklahoma County neigh-66borhoods are examined, including National Register 67Districts, state and locally designated historic districts, 68and control areas without any historical designation. 69Contributions of the study include allowing for spatial 70and temporal variation in hedonic prices and values of 71historic district designation, while also using Geo-72graphic Information System (GIS) identifiers to create 73finely-delineated spatial fixed effects. 74The next section reviews the empirical literature on 75estimating the economic effects of historic designation 76of neighborhoods for guidance in empirical specifica-77tion. Section 3 then formulates and discusses the em-78pirical model used in the study. Results and discus-79sion follow in Section 4. Generally it is found that his-80toric district neighborhoods experience increased 81property values relative to non-historic district neigh-82borhoods. However, the increases are not uniform 83across districts and appear related both to the length 84of time the neighborhood has had historic designation 85JRAP 39(2):99-108. © 2009 MCRSA. All rights reserved. 86 87 888990===== PAGE 5 (score 46, numeric-paren 0, table-words 7, var-words 20) =====9192Historic preservation status and housing values 93 103 94 95 96availability of nearby public parks, access to primary 97roads, proximity to attractive urban amenities such as 98Bricktown in downtown Oklahoma City, proximity to 99disamenities such as pollution, or access to water 100recreation opportunities. In addition, although not 101shown, the results reveal changes in the relative attrac-102tiveness of many neighborhoods. For example, houses 103in one neighborhood, which comprised about 5,500 104properties in the Year 2000 sample and encompassed 105an area including many of the historic districts, went 106from having a lower house value by $3,655 in 2000 107after controlling for housing characteristics to a higher 108value by $45,780 in 2003, an increase of $49,435. Val-109ues in other broad neighborhoods were much more 110stable.111 112Table 1. Base Model regression results. 113 114Year 2000 115Year 2003 116Variable 117Coefficient 118t-Statistic 119Coefficient 120t-Statistic 121Constant 12232,744.69 1234.972 124-744.0 125-0.066 126Square Feet 12719.903 1284.866 12932.911 1304.582 131(Square Feet)2 1320.004 1335.393 1340.007 1356.423 136Age 137-455.160 138-41.319 139-614.98 140-16.648 141(Age)2 1420.415 1437.327 1442.002 1454.641 146Rooms/Square Feet 1471,093,897 1482.406 1495,350,646 1505.39 151Bedrooms/Rooms 152-3,887.943 153-2.947 154-1,082.821 155-0.388 156Bathrooms 157896.266 1581.683 15910,706.93 16010.576 161Year Remodeled 1621.056 16311.900 1640.343 1652.256 166Garage Square Feet 16712.673 16827.806 16916.726 17027.861 171Carport Dummy Variable (Yes=1) 172939.558 1731.047 1749,104.345 1757.346 176Porch Square Feet 1778.835 17810.099 17911.136 1807.490 181Number of Stories 182-7,284.721 183-15.187 184-3,603.818 185-5.259 186Foundation is a Slab 187-413.565 188-1.772 189-5,099.968 190-15.189 191Roof Type: Gable 1924,664.230 19324.293 194-2,862.608 195-15.282 196Roof Type: Flat 197-1,520.997 198-12.607 199-16,895.01 200-8.113 201Roof Cover: Composition Shingle 202-2,118.425 203-1.369 204-7,863.394 205-7.362 206Roof Cover: Wood Shake 2071,055.740 2081.524 209-2,663.464 210-1.931 211Exterior: Frame Masonry Veneer 212199.077 2130.224 214-6,341.225 215-9.878 216Crown Heights 2178,855.167 2184.957 21961,823.22 22047.073 221Edgemere Park 2226,854.990 2233.201 22441,013.14 22527.463 226Jefferson Park 2276,562.413 2288.427 229-2,802.856 230-2.708 231Shepherd 232-837.900 233-1.205 2348,740.323 23512.206 236Paseo 237-2,434.624 238-1.444 2391,289.545 2400.712 241Heritage Hills 242-11,390.75 243-1.917 24433,808.32 2453.031 246Putnam Heights 247-6,365.538 248-1.747 249-17,303.18 250-4.523 251Mesta Park 252-1,409.864 253-1.365 2542,171.240 2551.362 256Gatewood East 2571,752.864 2581.290 2596,523.245 2605.043 261Gatewood West 262-2,490.629 263-3.251 2649,928.553 2659.769 266Capitol-Lincoln 267-2,446.370 268-2.370 26915,207.58 27010.762 271Condition/Quality Variables 272(Joint F-statistic and p-value) 273 274632.152 2750.000 276 27790.904 2780.000 279Neighborhood Fixed Effects 280(Joint F-statistic and p-value) 281491.949 2820.000 283376.059 2840.000 285R-squared 2860.877 2870.852 288Number of Observations 289179,526 290188,907 291292293===== PAGE 6 (score 18, numeric-paren 0, table-words 6, var-words 6) =====294295104 296 297Rickman 298In the Year 2000 sample, only four of the eleven 299historic districts have higher housing values (Crown 300Heights, Edgemere Park, Jefferson Park and Gatewood 301East), though the eleven variables are jointly signifi-302cant (F=14.77, p-value=0.00). However, in the Year 3032003 sample all but two (Jefferson Park and Putnam 304Heights) have higher housing values and the eleven 305variables 306are 307jointly 308significant 309(F=111.22, 310p-311value=0.00). Dramatic increases occurred in Crown 312Heights, Heritage Hills and Edgemere Park. 313For comparison purposes, the first column of Table 3142 displays the raw average change in housing values, 315i.e., the change which occurred not controlling for 316housing and location characteristics. The average 317change ranged from a low of approximately thirteen 318thousand dollars to a high of over ninety thousand 319dollars. For reference, the average property value in 320the samples increased from $66,201 to $84,027, an in-321crease of $17,826. This is exceeded by the increases in 322historic neighborhoods in all but three cases. For 323houses between 2,000 and 3,000 square feet, in which 324the mean square footage is 2,385 and the mean age is 32525 years, the average value increased from $106,501 to 326$125,984 (not shown), producing an increase compa-327rable to the entire sample. 328 329Table 2. Historic district house value appreciation ($). 330 331 332 Raw 333Sub-Model 1 334Sub-Model 2 335Sub-Model 3 336Full Model 337CROWN HEIGHTS 33888,094 33972,259 34071,755 34159,178 34252,968 343EDGEMERE PARK 34464,229 34544,398 34643,894 34734,346 34834,158 349JEFFERSON PARK 35013,722 351-2,353 352-2,582 353-8,261 354-9,365 355SHEPHERD 35631,893 35715,337 35814,833 3599,872 3609,578 361PASEO 36212,926 363-3,263 364-3,968 3654,598 3663,724 367HERITAGE HILLS 36894,279 36973,260 37081,672 37142,891 37245,199 373PUTNAM HEIGHTS 37436,651 37521,694 37621,190 3773,660 378-10,938 379MESTA PARK 38031,773 38116,300 38224,712 38313,762 3843,581 385GATEWOOD EAST 38613,136 3874,616 3887,652 3895,556 3904,770 391GATEWOOD WEST 39231,855 39311,101 39419,500 39514,292 39612,419 397CAPITOL-LINCOLN 39821,304 3994,955 40013,367 4016,539 40217,654 403 404Because they represent increases relative to the av-405erage change in their broader area, in which they also 406reflect controlling for housing characteristics, the in-407creases in the final column for historic districts are 408smaller than those in the first column. Specifically, 409each house in a historic district takes a value of 1 for 410the broad area of location and a value of 1 for location 411within the historic district. A positive value for the 412historic district coefficient indicates a higher value for 413the house relative to those in the surrounding area, 414controlling for housing-specific characteristics. In fact, 415because of the large estimated increase for the Crown 416Heights Historic District three additional dummy var-417iables are included in the regression to control for spe-418cific neighborhoods surrounding Crown Heights. 419Thus, the coefficient for the Crown Heights variable is 420interpreted as the effect relative to houses in the 421broader areas, and relative to the neighborhoods im-422mediately surrounding it. This greatly reduces the 423likelihood that the estimated increased value in the 424Crown Heights District is attributable to general in-425creased attractiveness because of other considerations 426(e.g., increased performance of its school district or 427increased demand for it). Moreover, many of the his-428toric districts are located in close proximity to one 429another when compared to other areas in Oklahoma 430County. 431 4324.2 Sensitivity analysis 433 434To assess the sensitivity of the results shown in the 435final column to potential econometric issues such as 436multicollinearity, three other regressions are per-437formed, with the results for the changes in house val-438ues in historic districts shown in columns 2-4 of Table 4392. The column 2 results are produced from regressions 440which solely include the historic district dummy var-441iables. Thus, they do not control for other housing 442characteristics or for the effects of location in the 443broader areas. The calculations reflect the change in 444the historic district relative to the omitted neighbor-445hood. 446The results in column 3 reflect the addition of the 447broad neighborhood fixed effects to the regression 448only containing historic district dummy variables. The 449historic district and neighborhood variables collective-450ly explain about 20 percent of the variation in housing 451values (not shown). The similarity of the results in 452columns 2 and 3 suggest there are few changes in his-453toric district housing values which are simply attribut-454able to changes occurring in their broader areas. 455