Housing Upgrading in Urban Redevelopment

Jing Li is an assistant professor at School of Economics, Singapore Management University. She is also a research fellow in Center for Research on the Economics of Aging(CREA) as well as in Sim Kee Boon Institute for Financial Economics(SKBI).

This paper exploits a unique large-scale housing upgrading program in Singapore to identify the demand for housing space across heterogonous households. The upgrading scheme adds additional space to the existing units and is carried out if sufficient residents vote in favor of the space adding. We identify the willingness to pay for space by comparing the per square meter price of the same property before and after the upgrading to other units that have not gone through upgrading. To further ensure comparable treatment and control groups, we restrict our sample to narrow margins around the voting cut-off. Results indicate that an additional 6 square meters of space added to a 3-room property induces a fall of per square meter price by 6%. We don’t find significant evidence for larger properties.