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Using almost three decades of full-population register data with detailed geo-coded informationon how and where all individuals in Sweden live, on their moving patterns, andon their socio-economic characteristics, this paper examines if new large-scale housing constructionis a suitable policy tool for revitalizing poor neighborhoods. The answer is yes.We reach four main conclusions. First, we find that new large developments of market-ratecondominiums have strong gentrifying effects: the estimated effect on average income is15% in the poorest quartile of neighborhoods. Second, the effect is not only driven by richerpeople moving into the newly built owned apartments, but also by average income risingby 10% in pre-existing homes. Since we do not find other concurrent housing-stock changessuch as renovations and rent increases, this indicates that the areas become more attractive.Third, most of the gentrifying effects are due to high-income people moving in from richerareas outside a wider neighborhood. Fourth, we do not find any displacement of incumbentresidents.
Brunåker et al. (Thu,) studied this question.