The Determinants of Housing Demolition and Abandonment

This paper explains variations in the rates of private demolition and abandonment of residential housing across the neighborhoods of a city (Chicago). An explicit distinction is purposely made between private demolition and abandonment. Such a distinction is necessary for Chicago (the data base of this study), where local statutes effectively provide a property owner with the possibility of shifting responsibility for the cost of demolition as well as some property taxes to the city by walking away (and ultimately forfeiting the title to) the property. This possibility will be defined as abandonment and can be contrasted to private demolition, whereby the owner does his own demolition and retains title to the property.' We are, therefore, investigating the response of housing producers to both market and non-market (legal) forces insofar as the decision to remove housing from the market is concerned.