Working Paper Series,
Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance

Abstract: Stockholm is constantly changing. New buildings are built, new infrastructure replaces old infrastructure, and the city grows with the addition of new areas. We ask whether specific changes impact surrounding areas in desirable ways. Using difference-in-difference methodology, we have analysed several new construction projects in Stockholm, Sweden, from 2009 to 2014. The outcome variables that we are most interested in are whether the projects themselves affected the socio-economic background of the residents (gentrification) and whether they have affected, or even impaired, affordability. Our results indicate a limited effect of new housing investments on the proportion of people with higher education and on the proportion of younger people. However, we found a positive effect on income and affordability, which may result in more significant gentrification and population displacement over time.

Keywords: housing investment; gentrification; affordability; difference-in-difference; Stockholm

JEL-codes: C21; R30; R58

Language: English

25 pages, August 16, 2022

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