Tearing the City Down: Understanding Demolition Activity in Gentrifying Neighborhoods

:We estimate the probability that a residential building in a gentrifying neighborhood will be demolished, situating the decision within a context of consumer preferences, neighborhood change, and public policy. We perform a logit analysis of address-level data for every privately initiated demolition permit issued in three Chicago community areas between 2000 and 2003. We find that smaller, older, frame buildings with less lot coverage had a greater probability of being demolished during this period. Political jurisdiction and socioeconomic factors, other than the change in Hispanic population, were less important than expected. Demolished structures were located in appreciating areas, further away from Tax Increment Financing districts. We speculate that this popular redevelopment tool has been used in areas with primarily commercial land uses on the periphery of residential neighborhoods and that rent gaps are reduced by the negative externalities associated with conflicting land uses.