Slum Clearance and Urban Renewal in the United States

We study the local effects of a federal program that helped cities clear areas for redevelopment, rehabilitate structures, complete city plans, and enforce building codes. We use an instrumental variable strategy to estimate the program’s effects on city-level measures of income, property values, employment and poverty rates, and population. The estimated effects on income, property values, and population are positive and economically significant. They are not driven by changes in demographic composition. Estimated effects on poverty reduction and employment are positive but imprecise. The results are consistent with a model in which local productivity is enhanced.