CDBG public improvements and residential property values: Evidence from Cuyahoga County, Ohio

Local governments frequently use place-based public investments for neighborhood revitalization. In this study, we investigate the impacts of public improvements funded by the Community Development Block Grant (CDBG) on residential property values in Cuyahoga County, Ohio, to assess the extent to which they improve neighborhood quality. Capitalization theory posits that if the property market values the addition of public improvements, the demand for properties would rise in response to that addition, ultimately leading to an increase in property values. While urban affairs scholarship supports the capitalization effect of CDBG investments, the timing dynamics of this capitalization remain less understood. Using parcel level data for the period 2000–2019, we employ a difference-in-differences model and event-study framework to examine these effects. Our findings indicate that CDBG projects significantly enhance residential property values in nearby areas. Our analysis reveals that this effect emerges approximately three years after completion and persists over time, offering valuable insights for urban governance.