Local policy makers seek ways to deal with abandoned industrial heritage in their jurisdictions. Many are demolished, but in some cases considerable investments are made to preserve the cultural aspects of industrial sites. The renewal plans are usually designed to stimulate urban renewal in the vicinity of these sites. Little seems to be known about the effectiveness of these policies. In this paper, we study whether the redevelopment of 36 industrial heritage sites in The Netherlands caused positive external effects by investigating the development of house prices in nearby residential areas. We use a difference-in-difference design by comparing quality-adjusted house prices in a predefined target and control area before the start, between the start and the completion and after the completion of the redevelopment. We also model the spatial and temporal dimensions of these external effects. We find that these dimensions matter substantially. We find that negative externalities on house prices before the start completely disappear after the start of the redevelopment of industrial heritage sites. We also find evidence for positive and local effects on house prices after the completion, but this result disappears when we remove the projects located in the largest cities.

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Abstract. Local policy makers seek ways to deal with their abandoned industrial heritage. The investments made in these industrial heritage sites are often very substantial and designed to stimulate urban renewal. In this paper, we study whether the redevelopment of five industrial heritage sites caused positive external effects by investigating the development of house prices for nearby residential areas. We use a quasi-experimental design by comparing quality-adjusted house prices before and after the transformation. The external effect is captured by interacting an indicator for the start and completion of the transformation with distance rings around the industrial heritage site -where we observe house transactions -while controlling for many other important variables. We pay special attention to defining the target and control area. We find substantial effects of one site, which is the best-known example of renovated industrial heritage, but much smaller or no effects for other well-known sites. Moreover, we find positive and significant external effects on house prices only if the investments were predominantly made on the exterior of the industrial heritage site. However, the decay of these effects over space is different for each case. We conclude that the external effects of the redevelopment of industrial heritage are highly heterogeneous and that the size of the positive externalities on nearby residential areas depends on the details of the transformation project. We use a quasi-experimental hedonic approach to see whether there are indeed external effects caused by the redevelopment of the industrial heritage and how large those effects are on the house prices of nearby residential areas. We pay special attention to defining the target and control area.This study should provide more insights in the possible external effects of redeveloping industrial However, their study lacks detailed empirical research to provide evidence on these matters.Linn (2013) provides some empirical evidence on the presence of external effects on nearby house values due to brownfield redevelopment in Illinois, U.S., but find these effects to be small (~1% for houses within 0.25 miles of a brownfield). He also mentions that each site appears to be quite heterogeneous, which is something we focus at in this paper.Our paper is related to the economic literature that investigates urban revitalization policies (Ahlfeldt et al