Neighborhood blight indices, impactson property values and blight resolution alternatives

Abstract

We identify the real and social costs associated with neighborhood blight by creating unique neighborhood blight indices based on average individual property blight scores in Memphis, Tennessee. Both individual property blight scores and neighborhood blight indices negatively impact single-family sale prices and assessed valuations. We validate the data accuracy of a 2016 blight survey, finding that supplemental information collected for each property accurately predicts its assigned blight score. We apply factor analysis, Shapley-Owen decomposition, and hedonic regressions to identify blight drivers that include neighborhood demographic and economic factors associated with both individual property and neighborhood blight. We find that blight scores provide informational value in addition to county assessor and data for each property and census data for each neighborhood. We quantify neighborhood characteristics and demographic factors impacting both individual property and neighborhood blight effects on neighborhood esthetics and property values that helps identify blight resolution alternatives.

Publication Title

Journal of Real Estate Research

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