Anticipatory Effect and Heterogeneity of Urban Renewal on Housing Prices: Evidence from Future Community Projects in Hangzhou

Urban community renewal serves as a crucial policy instrument for improving living environments and public services; housing markets often react to renewal expectations well before project completion. Focusing on Hangzhou’s first batch of “Future Community” renewal projects, this study examines the impact of the project list announcement on residential price expectations. Utilizing data from 27,172 secondary housing transactions across 1682 residential complexes between 2018 and 2022, the study employs hedonic price modeling and quantile regression to analyze the spatial scope of these announcement-driven expectations and to investigate variations based on existing public amenities, project construction progress, and the distribution of housing prices. The findings reveal that following the announcement of the first batch of Future Communities, residential prices within a 3-km radius were, on average, approximately 1.6% higher, with the price response intensifying as the distance to the Future Community decreased. For homes located within 1 km that lacked nearby parks or hospitals, the announcement generated additional price premiums of approximately 12.0% and 3.0%, respectively. Furthermore, following the official release of construction progress updates, homes near projects that had entered the full-scale construction phase exhibited an additional price premium of about 1.6%. Quantile regression results indicate significant heterogeneity in the announcement’s impact across the housing price distribution. The overall price response was relatively weak among low-priced homes but more pronounced among mid-to-high-priced homes, peaking at the 0.8 quantile before receding at the 0.9 quantile. As housing price levels rose, the additional price response associated with the lack of nearby parks gradually diminished; meanwhile, the price response linked to the absence of nearby hospitals was concentrated in the lower price range and turned negative in the higher price range. These results demonstrate that urban renewal plans can be reflected in housing prices through market expectations prior to project completion, with the magnitude of this effect jointly influenced by spatial proximity, existing community conditions, project implementation progress, and housing price levels.