Measuring the Impacts of Community Development Initiatives

Abstract

The authors contribute to the development of empirical methods for measuring the impacts of place-based local development strategies by introducing the adjusted interrupted time-series (AITS) approach. It estimates a more precise counterfactual scenario, thus offering a stronger basis for drawing causal inferences about impacts. The authors applied the AITS approach to three community development initiatives using single-family home prices as the outcome indicator and found that it could measure impacts on both the base level of prices and the rate of price appreciation. The authors also found a situation in which the method appears unreliable, however. The AITS approach benefits from more recurrent data on outcomes during the pre-and post-intervention periods, with an intertemporal pattern that avoids great volatility. The AITS approach to measuring effects of community development initiatives holds strong promise, with caveats.

Modeling Housing Appreciation Dynamics in Disadvantaged Neighborhoods

“…This is consistent with several other (though not all) examples of community development initiatives that yielded a one-time-only fillip in housing prices nearby without altering appreciation rates (Galster et al 2004). Despite conventional wisdom to the contrary, we find no evidence that increasing shares of home buyers who are investors signals imminent appreciation, once other leading economic characteristics of borrowers (i.e., income of borrowers and the overall denial rate for mortgage applications) and proxies for optimism (i.e., home sales rates and accumulated appreciation in nondisadvantaged tracts) and spatial spillovers have been controlled.…”

“…Galster et al 2004;Galster, Tatian, and Accordino 2006;Kolko 2007;Koschinsky 2008). A disadvantaged tract adjacent to an advantaged one had a 422 percent higher baseline odds of appreciating sometime during our analysis period compared to an otherwise identical tract not adjacent to such advantaged neighborhoods.…”

“…The last strand of relevant literature focuses on disadvantaged neighborhoods and tries to ascertain the degree to which significant investments aimed at community development succeed in changing the trajectory of the area's housing prices (Galster et al 2004;Galster, Tatian, and Accordino 2006;Rossi-Hansberg, Sarte, and Owens 2008). This literature employs variants of the adjusted interrupted time series econometric method to determine if home price trends or levels in target areas change significantly after the intervention in question.…”

Strategic, Geographic Targeting of Housing and Community Development Resources

“…A growing body of literature demonstrates that properly planned and implemented public and nonprofit investment in housing construction or rehabilitation and related community improvements can have a significant, positive spillover effect on properties near the site of the investment (Cowherd 2001;Ding and Knaap 2003;Ellen et al 2001;Ellen and Voicu 2006;Galster, Tatian, and Accordino 2006;Galster, Tatian, and Pettit 2004;Galster et al 2004a;Galster et al 2004b;Santiago, Galster, and Tatian 2001;Schill et al 2002;Smith and Hevener n.d.). While the methodological rigor of many recent studies breeds confidence in their findings relative to earlier ones, these studies measure spillover in terms of increased property values, leaving open the question of whether investment multiplier effects contributed to the increases.…”

Metromorphosis: Documenting Change

“…Interrupted time‐series analysis is the recommended methodology for measuring the impact of place‐based initiatives, especially community development initiatives (Bloom & Riccio, 2002; Galster et al, 2004). Interrupted time‐series analysis requires a number of data points before and at least one after a program intervention to establish a baseline trend and program effect for both target and extratarget areas.…”