Interstate Highways and Urban Blight: Evidence from Administrative Housing Data

Abstract

This paper estimates the effects of the Interstate Highway System on proximate urban neighborhoods using detailed American Housing Survey data from the 35 most-populous U.S. metropolitan areas. I begin by identifying seven adverse housing conditions and measuring their prevalence with respect to the observational housing units’ distance to the nearest Interstate. I then use weighted linear regressions to estimate the change in likelihood for the presence of each adverse condition when a housing unit is near an Interstate. I find that housing units within one kilometer of an Interstate are 50% more likely to report being near abandoned buildings, 43% more likely to report serious crime in their neighborhood, and 21% more likely to be deemed inadequate. Furthermore, residents of these Interstate-proximate units are 53% and 41% more likely to report dissatisfaction with their neighborhood and housing unit, respectively. To support these estimates by accounting for the fact that Interstates were often intentionally built through marginalized communities, I also employ an instrumental variable approach. My results provide new evidence and stylized facts on the Interstate system as a locus of urban blight.