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Urban blight is a complex problem that has been challenging for cities in the United States "Rust Belt" region for many decades. However, in the wake of the real estate and financial crisis, it is also a growing challenge for urban communities in many states such as California, Arizona, Nevada, and Texas. Detroit was particularly hit hard, where more than 40,000 blighted structures were identified in 2014. To curb blight, the city mobilized the most extensive demolition program in the country. Funded through the Federal Hardest Hit Fund (HHF), the Detroit Demolition Program began in 2014 and has demolished more than 20,800 properties at the cost of over $250 million. Furthermore, during 2009–2015, the city demolished 11,400 structures with hazardous materials such as asbestos. In this article, we assess the impacts of demolitions on the value of neighboring properties using a Repeat Sales (RS) regression approach. Specifically, we use housing sales price information from 2009 through 2019 to construct real estate price indices. We also rely on information from the 2009 Detroit Residential Survey to differentiate by dilapidation and blight levels before the start of the program. On average, blight removal through the demolition program does not appear to have been capitalized into the residential property prices. However, when considering the effect of ex‐ante program property characteristics, we find a modest positive effect of demolitions on property prices in areas with a low level of blight before the demolitions. Given the magnitude of the observed effect and the high costs associated with the demolition program, our results highlight the need for further research on alternative blight removal strategies that might provide a more cost‐effective solution to this urban challenge. [ABSTRACT FROM AUTHOR]

The purpose of this article is to evaluate the degree to which the demolition of low-quality structures affects property tax compliance in Detroit. During the real estate crisis, the rate of property tax delinquency in the city exceeded 50%. The demolition of dilapidated structures could lead to improvements in tax compliance in two ways. The first is through an amenity effect: removal of blighted structures improves the neighborhood and thus may increase the likelihood that neighbors pay their property taxes. The second is via the existence of a peer effect in property tax compliance decisions. We use a 6-year panel database to examine the degree to which demolitions affect nearby residential property tax delinquency. Even though we are unable to disentangle the amenity and peer effects, our analysis shows that when a dilapidated property is demolished, tax delinquency within the neighborhood is reduced, providing evidence that demolitions improve tax compliance. [ABSTRACT FROM AUTHOR]